TCR_Public/060801.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

             Tuesday, August 1, 2006, Vol. 10, No. 181

                             Headlines

2135 GODBY: Seeks Access to Insurance Proceeds to Pay for Repairs
2929 PANTHERSVILLE: Wants to Borrow Funds to Pay Insurance Premium
4 FRONT: Bankr. Ct. Sends Alvarez & Marsal Lawsuit to State Court
ADELPHIA: Ct. Wants Update on Century-TCI & Parnassos Plan by Oct.
ADELPHIA COMMS: Highfields and Tudor in Settlement Talks

APARTMENT INVESTMENT: S&P Alters Outlook to Stable & Holds Ratings
AVAYA INC: Earns $44 Million in Third Fiscal Quarter of 2006
BALL CORP: Board of Directors Approves New Rights Agreement
BEAZER HOMES: Earns $102.6 Million in Quarter Ended June 30, 2006
BLAINE MORTON: Case Summary & Five Largest Unsecured Creditors

BLOCKBUSTER INC: Reports $68.4 Mil. Second Quarter 2006 Net Income
BLYTH INC: Moody's Lowers Senior Notes' Rating to Ba3 from Ba2
BOWATER INC: Reports $10.6 Mil. Net Loss for Second Quarter 2006
BROCKWAY PRESSED: Agrees with Secured Lenders on Liens & Refunds
BROOK MAYS: Panel Wants August 8 Asset Sale Auction Postponed

CALGON CARBON: Earns $4 Million in 2006 Second Quarter
CARAUSTAR INDUSTRIES: Posts $8.2 Mil. Net Loss in Second Quarter
CARL YECKEL: Ch. 7 Trustee Wants Rule 2004 Test On Debtor & Spouse
CENDANT CORP: Moody's Downgrades then Withdraws Ratings
CENTEX CORP: Earns $160.2 Million in Fiscal 2006 First Quarter

CHI-CHI'S: William Kaye Wants Until Nov. 22 to Object to Claims
COLLINS & AIKMAN: Drops Adversary Proceeding Against GE Capital
COLLINS & AIKMAN: SEC Has Until August 31 to File Proofs of Claim
COMCAST CORP: Posts $460 Mil. Net Income for Second Quarter 2006
COMPLETE RETREATS: Selects Dechert LLP as Bankruptcy Counsel

COMPLETE RETREATS: Taps XRoads Solutions as Restructuring Advisor
CONEXANT SYSTEMS: Reports $67.1 Mil. Third Quarter 2006 Net Loss
COVAD COMMS: Earns $12.5 Million in Second Quarter of 2006
CUMMINS INC: Posts $220 Mil. Net Earnings for Second Quarter 2006
DANA CORP: WESCO Wants Stay Lifted to Terminate Pacts with Dana

DANA CORP: Asks Court to Bar WESCO from Terminating Agreements
DEATH ROW: Committee Wants Pachulski Stang as Bankruptcy Counsel
DELPHI CORP: Panel Wants to Ensure Seat in Delphi-GM Negotiations
DELPHI CORP: Deloitte & Touche Completes 2005 Annual Report Audit
DURA AUTOMOTIVE: Poor Performance Prompts S&P to Junk Rating

DURA OPERATING: Operation Shortfall Cues Moody's to Junk Ratings
EAGLEPICHER INC: Completes Chapter 11 Restructuring Process
ECHOSTAR COMMS: DBRS Holds BB Senior Unsecured Notes Rating
ENRE LP: Creditors Won't Receive Legal Fees Under Old Sec. 506(b)
ENTERGY NEW ORLEANS: Hires Claro Group as Insurance Consultant

FAIRFAX FINANCIAL: S&P Puts BB Counterparty Credit Rating on Watch
FISHER SCIENTIFIC: Reports Second Quarter Income of $121.4 Million
FOAMEX INTERNATIONAL: Amend Rights Agreement With Mellon Investor
FOAMEX INT'L: Wants to Assume ACE American Insurance Policies
GRUPO IUSACELL: Posts MXN867 Million Net Loss in Second Quarter

GULF COAST: Rejecting 163 Lease Pacts to Facilitate Asset Sale
HALL-GRAPEVINE: Case Summary & Eight Largest Unsecured Creditors
HEADWATERS INC: S&P Affirms BB- Rating on $700 Mil. Debt Facility
HEMOSOL CORP: CCAA Proceedings Stayed Until August 25
HILB ROGAL: 2006 Second Quarter Net Income Increases to $20.6 Mil.

INCO LTD: Gets Raised Offer of $82.50 Per Share from Teck Cominco
JABIL CIRCUIT: Completes $200 Million Stock Repurchase Plan
KEYSTONE AUTO: Moody's Junks $175 Million Senior Sub. Unsec. Notes
LAM RESEARCH: Earns $122.1 Million in Quarter Ended June 25
LINN ENERGY: Acquires Blacksand & Kaiser Units for $416 Million

LOVESAC CORP: Court Confirms Chapter 11 Joint Plan of Liquidation
MAGUIRE PROPERTIES: S&P Raises $432 Mil. Facilities' Rating to BB+
MANITOWOC CO: 2006 2nd Quarter Net Income Increases to $42.2 Mil.
MATHON FUND: Asks Court Approval on Stipulation in Aid of Plan
MATHON FUND: Brings In Brownstein Hyatt as Special Counsel

MAXXAM INC: PALCO Names George O'Brien as New President and CEO
MCCLATCHY CO: TRO Request to Bloc MediaNews Sale Denied
MCLEODUSA INC: Former CEO Pays $4.4 Million to Settle Lawsuit
MICROISLET INC: To Sell $3.9 Million of Common Stock
OMNICARE INC: Launches Omnicare Full Potential Program

PARAMOUNT RESOURCES: S&P Affirms Junks Ratings With Stable Outlook
PATRON SYSTEMS: Settles 94.1% of Eligible Claims
PERFORMANCE TRANSPORTATION: Sets Up Claims Settlement Protocol
PERFORMANCE TRANSPORTATION: Assumes Corporate Lodging Contract
PHIBRO ANIMAL: Moody's Junks Rating on $80 Million Senior Notes

POTLATCH CORP: DBRS Holds Rating on Senior Sub. Debt at BB(low)
PREMIUM PAPERS: Wants to Sell All of Smart Papers' Assets
RADNET MANAGEMENT: Moody's Junks $135 Million Sr. Sec. Term Loan
RESORT OF PALM BEACH: Case Summary & 11 Largest Unsec. Creditors
REFCO INC: RCM Unit's Organizational Meeting Set for August 2

REXAIR HOLDINGS: Moody's Rates Proposed $120 Mil. Sr. Loan at B1
REXAIR LLC: S&P Affirms B Corp. Credit Rating With Stable Outlook
RIEFLER CONCRETE: Sells All Assets to United Materials for $5.3MM
ROTEC INDUSTRIES: Hires Sonnenschein Nath as Legal Counsel
ROTEC INDUSTRIES: Committee Wants Landis Rath as Counsel

SAN PASQUAL: $114MM Casino Expansion Cues Moody's to Hold Ratings
SAVERS INC: Moody's Junks Rating on $140MM Sr. Subordinated Notes
SCOTTISH RE: Expects to Report $130 Million Second Quarter Loss
SCOTTISH RE: Hires Goldman Sachs & Bear Stearns for Advice
SCOTTISH RE: Scott E. Willkomm Resigns as President & CEO

SCOTTISH RE: Fitch Downgrades Default Rating to BBB from A-
SECUNDA INTERNATIONAL: Extends Tender Offer Expiration to Aug. 11
SERACARE LIFE: Wants to Walk Away from Five Unexpired Leases
SILICON GRAPHICS: Court Approves Modified Employee Incentive Plan
SILICON GRAPHICS: Gets Final Nod to Use Cash Management System

SKYEPHARMA PLC: PricewaterhouseCoopers Raise Going Concern Doubt
SOLO CUP: Names Eric Simonsen as Interim Chief Financial Officer
SPHINX STRATEGY: Chapter 15 Petition Summary
STOCKERYALE INC: Incurs $974,000 Net Loss in Second Quarter
SUSSER HOLDINGS: Moody's Holds B2 Rating on $170 Mil. Sr. Notes

TEREX CORP: Earns $119.2 Million in 2006 Second Quarter
TIME WARNER: Xspedius Acquisition Prompts S&P to Affirm B Rating
TRUMP ENT: Has Until August 8 to Object to N.J. Authority's Claims
TRUMP ENT: Ct. OKs Pact Resolving IRS Claims Against Trump Indiana
UNISYS CORP: Posts $193.6 Million Net Loss in Second Quarter

XM SATELLITE: 2006 Second Quarter Net Loss Increases to $229 Mil.
YUKOS OIL: Gazprom & Slovak Gov't. Eye 49% Stake in Transpetrol
ZALE CORPORATION: Elects Mary E. Burton as President and CEO

* Large Companies with Insolvent Balance Sheets

                             *********

2135 GODBY: Seeks Access to Insurance Proceeds to Pay for Repairs
-----------------------------------------------------------------
2135 Godby Property, LLC, asks the U.S. Bankruptcy Court for the
Northern District of Georgia for permission to use a portion of
the cash collateral securing repayment of its indebtedness to Legg
Mason Real Estate Holdings, VI, Inc., to pay Disaster Services,
Inc., for repair work in the Debtor's property.  

The Debtor owes Legg Mason approximately $11.6 million, in
principal amount.  According to Legg Mason, the Debtor remains in
default on its debt and, as of May 1, 2006, owes it $12,146,017.

Legg Mason asserts a first priority lien on the Quail Creek
Apartments -- a 486-unit apartment complex located at 2135 Godby
Road, College Park, Georgia.  As of the date of the last appraisal
of the property on March 7, 2005, the property was valued at
$15 million.  Legg Mason also asserts liens on the revenue from
the apartments.     

Todd E. Hennings, Esq., at Macey, Wilensky, Kessler, Howick &
Westfall, LLP, in Atlanta, Georgia, tells the Court that the
Debtor recently received a $193,551, check payment from the
proceeds of a fire insurance policy.  The check payment is part of
Legg Mason's collateral.  The Debtor wants to use the insurance
proceeds to pay for repairs.

Headquartered in Calabasas, California, 2135 Godby Property, LLC,
dba Quail Creek Apartments, owns and operates a 486-unit apartment
in 2135 Godby Road, College Park, Georgia.  The company filed for
chapter 11 protection on May 1, 2006 (Bankr. N.D. Ga. Case No.
06-65007).  Todd E. Hennings, Esq., at Macey, Wilensky, Kessler,
Howick & Westfall, LLP, represents the Debtor in its restructuring
efforts.  No Committee of Unsecured Creditors has been appointed
in the Debtor's case.  When the Debtor filed for protection from
its creditors, it estimated assets and debts between $10 million
and $50 million.


2929 PANTHERSVILLE: Wants to Borrow Funds to Pay Insurance Premium
------------------------------------------------------------------
2929 Panthersville Associates asks the U.S. Bankruptcy Court for
the Northern District of Georgia to approve the Debtor's premium
financing agreement with AICCO, Inc., for the funding of its
2006-2007 insurance policies for liability and property damage
coverage.  

John A. Christy, Esq., at Schreeder, Wheeler & Flint, in Atlanta,
Georgia, tells the Court that the Debtor has obtained property
damage and liability insurance for its 518-unit apartment project
known as the Spanish Trace Apartments located at 299 Panthersville
Road, Decatur, Dekalb, County, Georgia.   The Debtor obtained the
coverage through Specialty Insurance Corporation and Ohio Casualty
Insurance Company.  The total annual 2006-2007 premium for this
insurance is $86,077.  The Debtor does not have sufficient funds
on hand with which to conduct its ongoing operations and pay the
entire insurance premium.  Therefore, the Debtor proposes to enter
into a Premium Finance Agreement with AICCO.  

The proposed interest rate under the Premium Finance Agreement
is 11.25%, which is competitive for this type of financing, Mr.
Christy points out.  The total finance charge is $3,375 during the
period of the Premium Finance Agreement.  The Premium Finance
Agreement requires the Debtor to make ten monthly payments of
$6,793 starting on Aug. 21, 2006, with the final payment due on
May 21, 2006.  

Headquartered in Atlanta, Georgia, 2929 Panthersville Associates
owns a 518-unit apartment known as the Spanish Trace East
Apartments in Decatur, Georgia.  The company filed for chapter 11
protection on May 1, 2006 (Bankr. N.D. Ga. Case No. 06-64988).
John A. Christy, Esq., at Schreeder, Wheeler & Flint, LLP,
represents the Debtor.  No Committee of Unsecured Creditors
has been appointed in the Debtor's case.  When the Debtor filed
for protection from its creditors, it estimated assets between
$1 million and $10 million and debts between $10 million and
$50 million.


4 FRONT: Bankr. Ct. Sends Alvarez & Marsal Lawsuit to State Court
-----------------------------------------------------------------
A lawsuit filed by Patrick J. Malloy, III, as Trustee in
Bankruptcy for 4 Front Petroleum, Inc., against Alvarez and
Marsal, L.L.C., and others will be litigated in the Oklahoma State
Courts rather than the Federal court system.

On March 17, 2006, the Trustee filed a Petition in the District
Court in Tulsa County, Oklahoma, against officers and directors of
4 Front Petroleum, Inc., officers and directors of Git-N-Go, Inc.,
and Alvarez & Marsal.  The Trustee asserts claims of various
breaches of fiduciary duty against members of 4 Front and GNG
Management.   The Trustee asserts GNG breached its fiduciary
duties owed to 4 Front in its capacity as a substantial creditor
of GNG.  With respect to A & M, the Trustee charges that A & M
aided and abetted GNG Management's breach of fiduciary duties to 4
Front, that A & M breached fiduciary duties A & M itself owed to 4
Front as a "control person" of 4 Front and as a "control person"
of GNG, and that A & M committed professional negligence
(malpractice) to the detriment of 4 Front.

On March 31, 2006, A & M filed Notices of Removal to pluck the
lawsuit out of the Oklahoma State Court system and have it handled
in the Federal court system.  A & M filed the removal notices in
In re 4 Front Petroleum, Inc. (Bankr. N.D. Okla. Case No. 04-
10979-R and In re Git-N-Go, Inc. (Bankr. N.D. Okla. Case No. 04-
10509-R).  A & M argued that the claims advanced in the lawsuit
are "core" proceedings that "arise in" either or both bankruptcy
cases.  The Trustee denied that any of the claims in the State
Court Lawsuit constitute "core" proceedings.

In a decision published at 2006 WL 1997403, the Honorable Dana L.
Rasure ruled that mandatory abstention by the Bankruptcy Court is
warranted in this case, and must abstain from hearing the state-
court action.  The action, Judge Rasure says, involves only state-
law claims, was merely "related to" the bankruptcy cases, was
commenced in a state forum of appropriate jurisdiction, and can be
timely adjudicated in the state court.

Patrick J. Malloy, III, Esq., at Malloy Law Firm, P.C.,
represented the Debtor in this matter; Douglas L. Inhofe, Esq., at
Sneed Lang, PC, represented the Trustee; and David H. Herrold,
Esq., and John A. Bugg Herrold, Esq., at Herrold Herrold & Co.,
P.C., represented Alvarez & Marsal and its co-defendants.


ADELPHIA: Ct. Wants Update on Century-TCI & Parnassos Plan by Oct.
------------------------------------------------------------------
In a post-confirmation order and notice, the Honorable Robert D.
Gerber rules that the Plan Administrator is responsible for
informing the U.S. Bankruptcy Court for the Southern District of
New York of the progress made toward:

    (i) consummation of the Plan of Reorganization of the
        Century-TCI and the Parnassos Debtors;

   (ii) entry of a final decree under Rule 3022 of the Federal
        Rules of Bankruptcy Procedure; and

  (iii) case closing under Section 350 of the Bankruptcy Code.

The Century-TCI Debtors and the Parnassos Debtors are debtor-
affiliates of Adelphia Communications Corporation.  As defined in
the Plan for Century-TCI and Parnassos Debtors, Adelphia sits as
the interim Plan Administrator.

The Century-TCI Debtors are comprised of:

   * Century-TCI California, L.P.,
   * Century-TCI California Communications, L.P.,
   * Century-TCI Distribution Company, LLC, and
   * Century-TCI Holdings, LLC,

The Parnassos Debtors are comprised of:

   * Parnassos Communications, L.P.,
   * Parnassos Distribution Company I, LLC,
   * Parnassos Distribution Company II, LLC,
   * Parnassos, L.P.,
   * Parnassos Holdings, LLC, and
   * Western NY Cablevision, L.P.

Judge Gerber directs the responsible party appointed as Plan
Administrator to file by Oct. 14, 2006, a status report detailing
the actions taken by the Responsible Party and the progress made
toward the consummation of the JV Plan.  After October 14, reports
should be filed every January 15th, April 15th, July 15th, and
October 15th until a final decree has been entered.

Judge Gerber further directs the Responsible Party that within 60
days after paying the final distribution required by the JV Plan,
the Responsible Party should file a closing report in accordance
with Local Bankruptcy Rule 3022-1 and an application for a final
decree.

                  About Adelphia Communications

Based in Coudersport, Pa., Adelphia Communications Corporation
(OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest        
cable television company in the country.  Adelphia serves
customers in 30 states and Puerto Rico, and offers analog and
digital video services, high-speed Internet access and other
advanced services over its broadband networks.  The Company and
its more than 200 affiliates filed for Chapter 11 protection in
the Southern District of New York on June 25, 2002.  Those cases
are jointly administered under case number 02-41729.  Willkie Farr
& Gallagher represents the ACOM Debtors.  PricewaterhouseCoopers
serves as the Debtors' financial advisor.  Kasowitz, Benson,
Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP
represent the Official Committee of Unsecured Creditors.

Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of the
Rigas family.  In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision, LLC.  The RME Debtors filed for chapter 11 protection
on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through
06-10642).  Their cases are jointly adminsitered under Adelphia
Communications and its debtor-affiliates chapter 11 cases.  
(Adelphia Bankruptcy News, Issue No. 142; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


ADELPHIA COMMS: Highfields and Tudor in Settlement Talks
--------------------------------------------------------
Highfields Capital Management LP and Tudor Investment Corp. have
broken from the ad hoc committee of holders of ACC Senior Notes
and are talking to other creditors about a settlement, The Wall
Street Journal reports, citing people familiar with the talks.

The ACC Committee previously indicated that its members are
opposed to the settlement plan of Adelphia Communications
Corporation and its debtor-affiliates.  The ACC Committee also
support the Hold Back Plan.

In their Modified Fourth Amended Joint Plan of Reorganization
dated April 28, 2006, the ACOM Debtors proposed two mutually
exclusive options:

    (1) a "holdback plan" option that provided for continued
        litigation of the Inter-Creditor Dispute following the
        Effective Date, and

    (2) a "settlement plan" option that provided for resolution of
        the Inter-Creditor Dispute through several Potential
        Settlements.

Peter Grant at the Journal relates that the talks could still
break down and court approval of the settlement is uncertain.

                  About Adelphia Communications

Based in Coudersport, Pa., Adelphia Communications Corporation
(OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest        
cable television company in the country.  Adelphia serves
customers in 30 states and Puerto Rico, and offers analog and
digital video services, high-speed Internet access and other
advanced services over its broadband networks.  The Company and
its more than 200 affiliates filed for Chapter 11 protection in
the Southern District of New York on June 25, 2002.  Those cases
are jointly administered under case number 02-41729.  Willkie Farr
& Gallagher represents the ACOM Debtors.  PricewaterhouseCoopers
serves as the Debtors' financial advisor.  Kasowitz, Benson,
Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP
represent the Official Committee of Unsecured Creditors.

Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of the
Rigas family.  In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision, LLC.  The RME Debtors filed for chapter 11 protection
on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through
06-10642).  Their cases are jointly adminsitered under Adelphia
Communications and its debtor-affiliates chapter 11 cases.  
(Adelphia Bankruptcy News, Issue No. 143; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


APARTMENT INVESTMENT: S&P Alters Outlook to Stable & Holds Ratings
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Apartment Investment and Management Co. to stable from negative.

At the same time, the 'BB+' corporate credit and 'B+' preferred
stock ratings are affirmed.  The affirmations affect approximately
$623.75 million in rated preferred securities.

"The outlook revision acknowledges the portfolio's improved
performance, which has been supported by more favorable market
fundamentals and the company's implementation of new systems and
procedures to better manage the operations," said credit analyst
George Skoufis.  "Fixed-charge coverage remains relatively low,
but has stabilized, and should show modest improvement in 2006."

AIMCO's operating performance has benefited from improved
apartment fundamentals and should garner additional near-term and
longer-term stability from management's initiatives, including:

   * more proactive tenant acquisition/management;

   * cap-ex investments to improve asset quality; and

   * efforts to reposition the portfolio in more defensive
     markets.


AVAYA INC: Earns $44 Million in Third Fiscal Quarter of 2006
------------------------------------------------------------
Avaya Inc. reported net income of $44 million in the third fiscal
quarter of 2006 compared to net income of $194 million in the same
quarter last year.

The company reported that its third quarter results were affected
by $22 million of restructuring charges in its Europe, Middle East
and Africa regions and a $29 million asset impairment charge.

The company's third fiscal quarter 2006 revenues increased 4.9% to
$1.297 billion compared to $1.236 billion in the same period last
year.  Product sales worldwide rose 12% over the same period, with
U.S. product sales rising 15%.  The company's operating income for
the quarter was $28 million.  It also generated $181 million in
operating cash flow and had $822 million in cash at the end of the
quarter.

"We delivered another solid quarter of product sales growth.  
Driven by a 23 percent increase in IP line shipments, overall
product sales rose 12 percent, U.S. product sales increased
15 percent, and we shipped our 10 millionth IP line," said Garry
K. McGuire, chief financial officer, Avaya.  "While we are
encouraged by these positive trends, higher costs and expenses
during the quarter affected operating results.  We remain focused
on improving our cost and expense profile across geographies and
businesses, particularly in Europe."

The Company reported net income of $153 million for the first nine
months of fiscal 2006 compared to net income of $261 million for
the same period in 2005.  Its revenues for the first nine months
of fiscal 2006 were $3.784 billion compared to $3.606 billion last
year.  The company generated operating cash flow of $456 million
in the first nine months of fiscal 2006 compared to $186 million
in the year ago period.

                        Customer Update

The Company disclosed that Kimberly-Clark chose Avaya MultiVantage
Communications Applications to connect to its more than 57,000
employees worldwide.

It also disclosed that it was selected to participate in a
$4 billion project to overhaul voice and data communications
infrastructures of U.S. Army bases worldwide.

ING Mexico, a provider of insurance, pension benefits and
financial services, chose an Avaya contact center solution, and
established a contact center in Mexico City with 305 employees
handling an average of 220,000 calls each month.

Vanguard, a mutual fund firm in the U.S., selected Avaya for IP
telephony networking, applications and more than 18,000 endpoints
around the world including project design, implementation and
management and five years of maintenance services.

                        Market Leadership

The Company was named, for the third consecutive quarter, the
leader in U.S. Enterprise Telephony for the first quarter of 2006
according to InfoTech's InfoTrack for Enterprise Communications,
First Quarter 2006 Report.  The Company reportedly captured 19.8%
of the U.S. Enterprise Telephony market in the first quarter.

Headquartered in Basking Ridge, New Jersey, Avaya, Inc. (NYSE:AV)
-- http://www.avaya.com/-- designs, builds and manages  
communications networks for more than one million businesses
worldwide, including more than 90% of the FORTUNE 500(R).  Focused
on businesses large to small, Avaya is a world leader in secure
and reliable Internet Protocol telephony systems and
communications software applications and services.

                         *     *     *

As reported in the Troubled Company Reporter on Jan. 31, 2005,
Standard & Poor's Ratings Services raised its corporate credit
rating on Avaya, Inc., to 'BB' from 'B+'.

As reported in the Troubled Company Reporter on Jan. 21, 2005,
Moody's Investors Service upgraded the senior implied rating of
Avaya, Inc., to Ba3 from B1.  Moody's said the ratings outlook is
positive.


BALL CORP: Board of Directors Approves New Rights Agreement
-----------------------------------------------------------
The Ball Corporation's Board of Directors approved the execution
of a new Rights Agreement between the Company and Computershare
Investor Services, LLC, as Rights Agent.

The new rights agreement replaces the existing agreement between
the Company and First Chicago Trust Company of New York, which
expires on August 4, 2006.

The Company disclosed that in connection with the implementation
of the New Rights Agreement its board of directors declared a
dividend distribution of one right for each outstanding share of
its common stock, without par value, to the stockholders of record
on August 7, 2006.  Each new right will entitle the registered
holder to purchase from the Company a unit consisting of one one-
thousandth of a share of its Series A Junior Participating
Preferred Stock at a price of $185.00 per Unit.

The Company further disclosed that initially, the Rights will be
attached to all Common Stock certificates representing shares then
outstanding, and no separate Rights Certificates will be
distributed.

A copy of the New Rights Agreement may be viewed for free
at http://ResearchArchives.com/t/s?e89

Headquartered in Broomfield, Colorado, Ball Corporation --
http://www.ball.com/-- is a supplier of high-quality metal and  
plastic packaging products and owns Ball Aerospace & Technologies
Corp., which develops sensors, spacecraft, systems and components
for government and commercial customers.  Ball reported 2005 sales
of $5.7 billion and the company employs 13,100 people worldwide.

                         *     *     *

As reported in the Troubled Company Reporter on Mar. 6, 2006,
Moody's Investors Service assigned ratings to Ball Corp's
$500 million senior secured term loan D, rated Ba1, and
$450 million senior unsecured notes due 2016-2018, rated Ba2.  It
also affirmed existing ratings, which include Ba1 Ratings on
$1.475 billion senior secured credit facilities and $550 million
senior unsecured notes due Dec. 12, 2012.  Moody's said the
ratings outlook is stable.

As reported in the Troubled Company Reporter on Mar. 2, 2006,
Fitch said Ball Corporation's recently announced acquisitions will
not affect the company's credit ratings based on the currently
available information. Fitch currently rates BLL as:

   -- Issuer default rating (IDR) 'BB'
   -- Senior secured credit facilities 'BB+'
   -- Senior unsecured notes 'BB'

As reported in the Troubled Company Reporter on Feb. 20, 2006,
Standard & Poor's Ratings Services revised its outlook on
Broomfield, Colo.-based Ball Corp. to stable from positive.  At
the same time, it affirmed its ratings, including 'BB+' corporate
credit rating, on the metal can and plastic packaging producer.  
These actions follow the announcement by Ball of its entry into a
definitive agreement to acquire U.S. Can Corp.'s U.S. and
Argentinean operations for approximately 1.1 million shares of
Ball common stock and the assumption of a $550 million debt.


BEAZER HOMES: Earns $102.6 Million in Quarter Ended June 30, 2006
-----------------------------------------------------------------
Beazer Homes USA, Inc., reported net income of $102.6 million
on total revenues of $1.20 billion for the quarter ended
June 30, 2006, compared to net income of $112.7 million on total
revenues of $1.29 billion in the prior year's third quarter.

The results for the quarter also included approximately
$11 million in pre-tax charges to write off land options and exit
positions that were no longer providing sufficient returns.  The
company also incurred approximately $1 million of additional
pre-tax charges during the quarter to exit land positions and
close its operations in Ft. Wayne and Lafayette, Indiana while
significantly downsizing its operations in Memphis, Tennessee.

"Beazer Homes delivered solid fiscal third quarter financial
results in an increasingly difficult housing market," said
president and chief executive officer, Ian J. McCarthy.

The Company disclosed total home closings declined 10.3% from the
prior year.  Net new home orders totaled 4,378 homes for the
quarter, a decline of 15.8% from the third quarter of the prior
year.

The Company also disclosed that, during the third quarter of
fiscal 2006, it repurchased 1,069,100 shares of its common stock
under its 10 million share repurchase authorization for
approximately $50.1 million or $46.88 per share and to date has
repurchased 3,090,900 shares, for a total of $183.3 million.

Headquartered in Atlanta, Beazer Homes USA, Inc., (NYSE: BZH) --
http://www.beazer.com/-- is one of the country's ten largest  
single-family homebuilders with operations in Arizona, California,
Colorado, Delaware, Florida, Georgia, Indiana, Kentucky, Maryland,
Mississippi, Nevada, New Jersey, New Mexico, New York, North
Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas,
Virginia and West Virginia and also provides mortgage origination
and title services to its homebuyers.

                         *     *     *

As reported in the Troubled Company Reporter on June 7, 2006,
Moody's Investors Service assigned a Ba1 rating to $275 million of
8.125%, 10-year senior notes of Beazer Homes USA, Inc.  At the
same time, Moody's affirmed Beazer's corporate family rating of
Ba1 and the Ba1 ratings on the company's existing senior note
issues.  The ratings outlook is stable.

As reported in the Troubled Company Reporter on June 6, 2006,
Fitch Ratings assigned a 'BB+' rating to Beazer Homes USA, Inc.'s
$275 million, 8.125% senior unsecured notes due 2016.

Fitch affirmed Beazer's 'BB+' Issuer Default, senior unsecured
debt and unsecured bank credit facility ratings.  The Rating
Outlook is Stable.  The issue will be ranked on a pari passu basis
with all other senior unsecured debt, including the company's
unsecured bank credit facility.


BLAINE MORTON: Case Summary & Five Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Blaine Morton
        762 Norumberga Drive
        Monrovia, CA 91016

Bankruptcy Case No.: 06-13507

Type of Business: The Debtor filed for chapter 11 protection on
                  April 26, 1996 (Bankr. C.D. Calif. Case No. 96-
                  23335).

Chapter 11 Petition Date: July 31, 2006

Court: Central District Of California (Los Angeles)

Judge: Victoria S. Kaufman

Debtor's Counsel: David A. Tilem, Esq.
                  206 North Jackson Street, Suite 201
                  Glendale, CA 91206
                  Tel: (818) 507-6000
                  Fax: (818) 507-6800

Total Assets: $1,732,058

Total Debts:  $2,540,162

Debtor's Five Largest Unsecured Creditors:

   Entity                        Nature of Claim     Claim Amount
   ------                        ---------------     ------------
Internal Revenue Service                                 $683,728
Insolvency I, Stop 5022
300 North Los Angeles Street
Suite 4062
Los Angeles, CA 90012-9903

Franchise Tax Board              Federal Income Taxes    $116,480
P.O. Box 2952
Sacramento, CA 95812-2952

Capital One                      Credit Card Purchases     $5,746
P.O. Box 30285
Salt Lake City, UT 84130-0285

Capital One Bank                 Credit Card Purchases     $1,943
P.O. Box 30285
Salt Lake City, UT 84130-0285

First Premier Bank               Credit Card Purchases       $207
P.O. Box 5524
Sioux Falls, SD 57117-5524


BLOCKBUSTER INC: Reports $68.4 Mil. Second Quarter 2006 Net Income
------------------------------------------------------------------
Blockbuster Inc.'s net income for the second quarter of 2006
totaled $68.4 million, compared to a net loss of $57.2 million for
the second quarter of 2005.

Excluding the impact of favorable tax audit settlements, costs
incurred for store closures and discontinued operations in Spain,
adjusted net loss totaled $21.4 million an improvement of
$23.2 million as compared with adjusted net loss of $44.6 million
for the second quarter of 2005.

"Our second quarter 2006 results mark our third consecutive
quarter of solid performance and demonstrate the continued
successful execution of our business plan," said Blockbuster
Chairman and chief exevutive officer John Antioco.  "Domestic
same-store movie rental revenues increased 3.8%.  Our
profitability and cash flow have improved significantly year-over-
year, and as a result, our balance sheet is much healthier.  We
have also gained momentum in our online business.  In short, we
achieved our objectives for the quarter and will continue to work
toward driving improved results while focusing on our combined in-
store and online offering."

The Company's revenues for the second quarter of 2006 declined 5%
to $1.32 billion compared with $1.39 billion for the second
quarter of last year, due to closure of stores and lower margin
retail sales.

Its operating loss for the second quarter of 2006 was
$6.4 million, an improvement of $49.6 million from an operating
loss of $56 million for the second quarter of 2005.

The Company's income from continuing operations, excluding a gain
of $7.7 million on discontinued operations in Spain, totaled
$60.7 million for the second quarter of 2006 compared with a loss
from operations of $55.4 million for the second quarter of 2005.

Its operating income increased $147.9 million to $20.7 million
for the first six months of 2006 from a loss of $127.2 million
for the first six months of 2005 and cash flow provided by
operating activities for the first six months of 2006 increased
by $205 million to $17.7 million from a $187.3 million deficit for
the first six months of 2005.  It also disclosed that cash flow
was impacted by a settlement of income tax audits, which resulted
in a cash receipt of approximately $21 million and a reduction of
accrued liabilities.

The Company paid down approximately $150 million in debt including
the entire $135 million balance outstanding under its revolving
credit facility at Dec. 31, 2005, increasing its borrowing
capacity to approximately $293 million at June 30, 2006.

                       About Blockbuster

Blockbuster Inc. (NYSE: BBI, BBI.B) -- http://www.blockbuster.com/
-- is a global provider of in-home movie and game entertainment,
with more than 9,000 stores throughout the Americas, Europe, Asia
and Australia.

                         *     *     *

As reported in the Troubled Company Reporter on March 15, 2006,
Moody's Investors Service affirmed Blockbuster Inc. long-term debt
ratings and its SGL-3 speculative grade liquidity rating.  Moody's
affirmed its B3 rating on the Company's Corporate family rating
and Senior secured bank credit facilities at B3.  Moody's also
affirmed its Caa3 rating on the Company's Senior subordinated
notes.

Standard & Poor's Ratings Services lowered, in November 2005, its
corporate credit and bank loan ratings on Blockbuster Inc. to 'B-'
from 'B' and the subordinated note rating to 'CCC' from 'CCC+'.
S&P said the outlook is negative.

Fitch downgraded, in August 2005, Blockbuster Inc.'s Issuer
default rating to 'CCC' from 'B+'; Senior secured credit facility
to 'CCC' from 'B+' with an 'R4' recovery rating; and Senior
subordinated notes to 'CC' from 'B-' with an 'R6' recovery rating.


BLYTH INC: Moody's Lowers Senior Notes' Rating to Ba3 from Ba2
--------------------------------------------------------------
Moody's Investors Service lowered Blyth, Inc.'s corporate family
rating and senior unsecured notes rating to Ba3 from Ba2.  The
downgrade reflects a continuation of negative profit and cash flow
trends since Moody's last lowered the ratings in December 2005,
and the expectation that weak discretionary spending, elevated raw
material costs, and consultant declines due to increased
competition from other direct sellers will continue to pressure
its core business, with no clear point of stabilization.   
Nevertheless, the ratings recognize that the company's large cash
and investments balance and modest positive free cash flow could
accommodate material debt reduction.

Blyth's Ba3 rating is primarily driven by a challenging operating
environment that has resulted in continued negative profit trends
and significant business risks given the intense competition for
sales consultants, exposure to volatile raw material costs, and
the mature nature of the candle and home expression products.   
Given profit trends, Moody's believes that credit metrics will
likely worsen without material reductions in debt.

The ratings also consider uncertainty regarding Blyth's long-term
strategic and financial direction given the company's past
emphasis on share repurchases and its decision to divest certain
European wholesale businesses that were recently acquired.  
The ratings are supported by the company's current, albeit
deteriorated, LTM credit metrics that are consistent with other
Baa/Ba rated companies, its solid business position in the candle
category, and the diversity of its distribution channels and
retail customer base.

The stable outlook reflects Moody's expectation that Blyth's
direct selling segment's operating performance will decline at
a moderating rate, the North American Wholesale and Catalog &
Internet businesses will sustain their current level of
performance, and that the company will emphasize debt reduction
over share repurchases in the near-term such that debt to EBITDA
will be about about 3x with free cash flow to debt equal to around
10% for fiscal year 2007.

Headquartered in Greenwich, Connecticut, Blyth, Inc. designs,
manufactures and markets a line of candles and home fragrance
products, tabletop heating products, candle accessories and home
decor and giftware products.  The company reported revenues of
$1.5 billion for the LTM ended April 30th, 2006.


BOWATER INC: Reports $10.6 Mil. Net Loss for Second Quarter 2006
----------------------------------------------------------------
Bowater Incorporated reported a net loss of $10.6 million on sales
of $899.4 million for the second quarter of 2006 compared with a
net loss of $3.6 million on sales of $897.5 million in the second
quarter of 2005.

"Our second quarter financial results were impacted by additional
costs related to scheduled operational maintenance, conversion of
a newsprint machine to specialty papers at our Calhoun, Tennessee
facility and permanent closure of a market pulp line at our
Thunder Bay site," David J.  Paterson, president and chief
executive officer, said.  "However, with these events largely
behind us, I look forward to improved operational and financial
performance which, when combined with our asset sale program,
should lower our debt levels in the second half of the year."

The asset sale program of the Company during the second quarter
had proceeds of $201.3 million providing an after-tax gain of
$45.7 million resulting to a decline of total debt by $148
million.

During the first quarter of 2006, the Company sold its Degelis
sawmill and approximately 24,000 acres of timberlands located in
Tennessee and during the second quarter of 2006, it sold its Baker
Brook sawmill and approximately 472,000 acres of timberlands
located in Tennessee and the Canadian province of New Brunswick.  
As of June 30, 2006, it has approximately 42,000 acres classified
as timberlands held for sale.

A full-text copy of the Company's quarterly report is available
for free at http://ResearchArchives.com/t/s?e92

Headquartered in Greenville, South Carolina, Bowater Incorporated
(TSX: BWX) produces newsprint and coated mechanical papers.  In
addition, the company makes uncoated mechanical papers, bleached
kraft pulp and lumber products.  The company approximately has
7,800 employees and has 12 pulp and papermills in the United
States, Canada and South Korea and 12 North American sawmills that
produce softwood lumber.  Bowater also operates two facilities
that convert a mechanical base sheet to coated products.  
Bowater's operations are supported by approximately 1.4 million
acres of timberlands owned or leased in the United States and
Canada and 30 million acres of timber cutting rights in Canada.
Bowater common stock is listed on the New York Stock Exchange, the
Pacific Exchange and the London Stock Exchange.  A special class
of stock exchangeable into Bowater common stock is listed on the
Toronto Stock Exchange.

                         *     *     *

As reported in the Troubled Company Reporter on June 27, 2006
Fitch Ratings has assigned a 'BB' rating to Bowater, Inc.'s senior
secured bank debt.  The company's issuer default ratings, 'BB-'
and senior unsecured bond ratings, 'BB-', remain unchanged.  The
Rating Outlook remains Stable.

As reported by the Troubled Company Reporter on June 21, 2006
Moody's Investors Service affirmed the Company's B1 long term debt
ratings and SGL-2 speculative grade liquidity rating. The Outlook
is Stable.

As reported in the Troubled Company Reporter on June 2, 2006,
Dominion Bond Rating Service downgraded the rating of Bowater
Canadian Forest Products Inc. to BB (low) from BB.  The trend
remains Negative.

Standard & Poor's Ratings Services lowered its ratings on Bowater
and subsidiary Bowater Canadian Forest Products Inc., including
the corporate credit rating on each entity to 'B+' from 'BB' in
December 2005.  S&P said the outlook is stable.


BROCKWAY PRESSED: Agrees with Secured Lenders on Liens & Refunds
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Pennsylvania
approved a stipulation among Brockway Pressed Metals, Inc.,
LaSalle Bank National Association and the Debtor's designated
customers -- BorgWarner, TorqTransfer Systems, Inc., General
Motors Corporation, and AVM, Inc.

Daniel A. Zazove, Esq., at Perkins Coie LLP, in Chicago, Illinois,
tells the Court that the designated customers are companies for
whom the Debtor manufactured automotive component parts.

Pursuant to the Court's order approving the use of LaSalle Bank's
cash collateral, LaSalle Bank has valid and enforceable liens
upon, and security interests in the Debtor's prepetition assets,
including accounts and general intangibles.  Pursuant to the
Court's order approving the debtor-in-possession financing, the
Designated Customers have valid and perfected liens upon, and
security interests in substantially all assets acquired by the
Debtor postpetition.  

The Debtor maintained payroll accounts for its hourly and salaried
employees at First Commonwealth Bank and funds representing the
Bank's cash collateral and proceeds of the DIP loans were
deposited in the Bank Accounts.  Following the sale of
substantially all of the Debtor's assets, the Debtor terminated
all of its hourly and salaried employees and paid all compensation
due to them through the dates of their termination.

Rally Capital Services LLC, the Debtor's financial advisor,
conducted an analysis of the Payroll Accounts to determine the
respective interests of the Bank and the Designated Customers in
the balances remaining in those Accounts and has determined that
there are cash proceeds remaining in the Bank Accounts totaling
$52,333, comprised of $25,811 in Account no. 417-510269, and
$26,521 in Account no. 404-700813.

With respect to the portion of the cash proceeds that constitute
prepetition cash collateral of the Bank and the portion would
constitute postpetition collateral of the Designated Customers on
account of their security interests in the funds on deposit in the
Bank Accounts, based upon Rally's analysis, after deducting
amounts due to the United States Trustee for quarterly fees,
$41,372 belongs to the Bank, and $4,672 belongs to the Designated
Customers.

The Debtor paid premiums to Pennsylvania's State Workers Insurance
Fund for worker's compensation insurance.  The Debtor used
proceeds of the Bank's collateral and the proceeds of the
Designated Customers' DIP loans to pay premiums.

In January 2006, the Debtor received a refund of premiums
previously paid to SWIF:

   Coverage Period                         Refund Amount
   ---------------                         -------------
   November 27, 2004 to April 20, 2005          $110,223
   April 28, 2005 to September 13, 2005         $ 38,677

On January 31, 2006, these amounts were paid by SWIF to the
Debtor's local counsel, the Bernstein Law Firm, PC, and are being
held in their IOLTA account.

Based upon advances by the Bank and the Designated Customers to
the Debtor, Rally has determined that $27,439.31 of the SWIF
refund is payable to the Designated Customers, and that the
remainder of the SWIF refund in the amount of $121,460.69, is
payable to the Bank, on account of their liens upon accounts and
general intangibles of the Debtor which would encompass the
refund.

Headquartered in Brockway, Pennsylvania, Brockway Pressed Metals,
Inc. -- http://www.brockwaypm.com/-- manufactures a wide range of    
highly engineered metal parts and sub-assemblies.  The Company
specializes in automotive applications, including engine and
transmission components, electronic actuators, steering
components, cruise control devices, assembled camshafts, and gas
springs.  The Company filed for chapter 11 protection on June 8,
2005 (Bankr. W.D. Pa. Case No. 05-11891).  Robert S. Bernstein,
Esq., at Bernstein Law Firm, P.C., and Daniel A. Zazove, Esq., at
Perkins Coie LLP represents the Debtor in its restructuring
efforts.  Guy C. Fustine, Esq., at Knox McLaughlin Gornall &
Sennett, P.C., represents the Official Committee of Unsecured
Creditors.  When the Debtor filed for protection from its
creditors, it estimated assets and debts of $10 million to
$50 million.


BROOK MAYS: Panel Wants August 8 Asset Sale Auction Postponed
-------------------------------------------------------------
The Official Committee Of Unsecured Creditors appointed in Brook
Mays Music Company's chapter 11 case asks the U.S. Bankruptcy
Court for the Northern District of Texas to postpone the auction
for substantially all of the Debtor's assets.

Currently, the auction of the Debtor's assets is set for Aug. 8,
2006, a hearing to approve the sale is set for  Aug. 9, 2006, and
the sale is expected to close on Aug. 10, 2006.  

Scott E. Blakeley, Esq., at Blakeley & Blakeley, LLP, in Irvine,
California, reminds the Court that the Debtor sought to borrow
more funds under a debtor-in-financing facility from a group of
financial institutions, with JPMorgan Chase Bank, N.A., as
administrative agent.  Mr. Blakeley points out that the Debtor's
request, as proposed, strips any value unsecured creditors may
receive by granting the Bank Group extraordinary protections such
as superpriority claims on the Debtor's leasehold interest and
avoidance actions, given the Debtor's assets will not sell for
greater than its secured debt.  The Committee objects to the terms
of DIP Facility that grant superpriority status to the Bank Group,
because that grant will result in the unnecessary depletion of the
Debtor's estate.  The proposed post petition financing results in
the Debtor's unencumbered assets being used to finance the sale
when the only beneficiary is the Bank Group.

The postpetition financing budget agreed to by the Bank Group runs
only through the week of August 19, 2006.  

Mr. Blakeley asserts that an auction of the Debtor's assets should
not be permitted to proceed at this time, given that any proceeds
from the sale will not exceed the value of the Bank Group's
secured claims, and the DIP Facility, as proposed, results in the
Debtor's unencumbered assets being used for the sale, which
benefits only the Bank Group.  The Debtor's estate will continue
to incur administrative expenses in connection with, among other
things, record-keeping, reconciliation and payment of
administrative and priority c1aims, employee and retire benefit
issues, investigation and recovery of voidable transfers, and
carrying costs for the Debtor's store leases.   

Mr. Blakeley explains that permitting the auction to proceed at
this time would leave the Debtor with no ability even to fund
wind-down operations or confirm a liquidating plan, the bulk of
the Debtor's assets would have been sold and the proceeds funneled
to pay the Bank Group's outstanding claims.  Worse yet, it seems
that the Bank Group wants to pay for the costs of this case,
including the liquidation, by liquidating and encumbering for its
benefit the small amount of unencumbered assets that may exist
should the DIP Facility be approved as proposed.  This is
inherently unfair to the general unsecured creditors, Mr. Blakeley
laments.

Mr. Blakeley argues that It has become apparent that the estate
will become administratively insolvent after the Debtor's assets
are liquidated for the Bank Group's benefit, especially under the
terms of the DIP Facility.  The Debtor cannot make any meaningful
payment to unsecured creditors from disposition of its assets, and
the Debtor cannot propose a confirmable plan.  The only
beneficiary of a sale that will not provide a full distribution to
priority creditors, let alone unsecured creditors, is the Bank
Group.  

Headquartered in Dallas, Texas, Brook Mays Music Company --
http://www.brookmays.com/-- is a full-line musical instrument
retailer in the U.S.  It offers a broad range of educational
services, complete instrument repair and overhaul facilities and
operates a rental program for musical instruments.  The Company
filed for chapter 11 protection on July 11, 2006 (Bankr. N.D. Tex.
Case No. 06-32816).  Marcus Alan Helt, Esq., and Michael S.
Haynes, Esq., at Gardere Wynne Sewell LLP, represent the Debtor.
The Recovery Group, Inc., serves as the Debtor's financial advisor
while Houlihan Lokey Howard and Zukin Capital, Inc., acts as
restructuring advisor.  The Debtor has selected Kurtzman Carson
Consultants LLC as its Notice, Claims and Balloting Agent.
When it filed for bankruptcy, the Debtor estimated its assets
at $10 million to $50 million and its debts at $50 million to
$100 million.


CALGON CARBON: Earns $4 Million in 2006 Second Quarter
------------------------------------------------------
For the second quarter of 2006, Calgon Carbon Corporation reported
net income of $4 million, compared to $2 million for the second
quarter of 2005.

The Company's net sales from continuing operations increased 3.7%,
from $77.7 million in the second quarter of 2005 to $80.5 million
for the second quarter ended June 30, 2006.

Commenting on the results, John Stanik, Calgon Carbon's president
and chief executive officer, said, "The quarterly results were
complex, reflecting both positives and negatives.  The year-over-
year sales growth in the Carbon and Service and Consumer
businesses, is encouraging and indicates progress in our efforts
to strengthen our core business.  However, the trend in lower
demand for perchlorate removal systems continues to have
a negative impact on the Equipment segment's revenue.  On the
expense side, continuing higher legal fees, which were expected,
had a significant negative impact on the quarter.  However, the
settlement of part of our insurance claim had a significant
positive impact on the quarter."

                      Half-Year 2006 Results

For the six months ended June 30, 2006, the Company's net sales
from continuing operations increased 4.2%, to $157.1 million
from $150.7 million for the comparable period in 2005, while
the Company's income from operations was $1.8 million, versus a
loss of $3.7 million for the first half of 2005.

The Company's net income for the first half of 2006 was $4.0
million and included $0.6 million from continuing operations and
$3.3 million from discontinued operations.

The Company incurred a net loss of $1.4 million for the first half
of 2005 which included a $4.2-million loss from continuing
operations and income of $2.8 million from discontinued
operations.

                     Credit Facility Default

As of June 30, 2006, the Company remained in default of its U.S.
credit facility.  It continues to classify the borrowings
outstanding on that facility as short-term debt.  The Company is
evaluating several options to restructure its credit facility.

Calgon Carbon's board of directors did not declare a quarterly
dividend.

Headquartered in Pittsburgh, Pennsylvania, Calgon Carbon
Corporation provides water and air purifying products and
services.


CARAUSTAR INDUSTRIES: Posts $8.2 Mil. Net Loss in Second Quarter
----------------------------------------------------------------
Caraustar Industries, Inc., reported that sales from continuing
operations for the second quarter ended June 30, 2006 were
$233.8 million, an increase of 7.6% over sales of $217.2 million
for the same quarter in 2005.  Loss from continuing operations for
the second quarter of 2006 was $8.1 million, compared to 2005
second quarter income from continuing operations of $1.1 million.

For the three months ended June 30, 2006, the Company reported a
net loss of $8,206,000 compared to a net income of $114,000 for
the same period in 2005.

The second quarter 2006 and 2005 results included restructuring
and impairment costs of approximately $3.6 million and $0.3
million pre-tax.  The second quarter 2006 results also included
$0.7 million in accelerated depreciation related to four closed
facilities, severance cost of $0.5 million, an inventory write-
down of $0.5 million and a cost of $12.4 million associated with
the redeemed senior subordinated notes ($10.3 million loss on
redemption and $2.1 million interest expense).  The company
accrued $1.5 million related to a vendor claim in the second
quarter of 2006.  The vendor claims that it under billed the
company and the company expects that the amounts it has accrued
regarding this matter will be sufficient.

Caraustar's 50% interest in the Premier Boxboard Limited mill
contributed $2.0 million in equity in income of unconsolidated
affiliates for the second quarter 2006 compared to $2.2 million
last year.  For the six months ended June 30, 2006, Caraustar's
share of PBL's income was $3.6 million compared to $4.0 million
for the same period last year, down primarily due to a 5 day power
utility outage in the first quarter 2006.  Year to date, Caraustar
received $5.0 million in cash distributions from PBL in both 2006
and 2005. In 2006, the full amount was received in the second
quarter, whereas in 2005, $1.0 million was received in the first
quarter and $4.0 million was received in the second quarter.

               Six-month period ended June 30

Sales from continuing operations for the six-month period ended
June 30, 2006 were $468.1 million, an increase of 7.0% compared to
sales of $437.4 million for the same period in 2005.  Income from
continuing operations for the six-month period in 2006 was
$77.1 million, compared to income from continuing operations for
the six-month period in 2005 of $3.1 million.  Income from
continuing operations for the first half of 2006 included
restructuring charges of $3.6 million, a gain of $135.2 million on
the sale of the company's 50% interest in its Standard Gypsum
joint venture, and a cost of $18.8 million associated with the
redeemed senior subordinated notes ($10.3 million loss on
redemption and $8.5 million interest expense).

Income from operations decreased from $10.2 million for the six-
month period ended June 30, 2005 to $4.5 million for the same
period in 2006.  The primary factors for this decrease in income
from operations were higher fuel and energy costs in the
paperboard mills of approximately $3.7 million, higher
restructuring and impairment costs of $2.8 million, expense of
$1.5 million related to a vendor claim and increased selling,
general and administrative costs of $2.1 million.  These factors
were partially offset by higher selling prices and lower recovered
fiber costs.  Selling, general and administrative costs were
higher due primarily to a $1.2 million settlement of a patent
infringement claim recorded in the first quarter of 2006 and
$0.5 million related to severance.

The sale of Caraustar's 50% interest in Standard Gypsum on
January 17, 2006 resulted in the reduction in equity in income of
unconsolidated affiliates from $17.9 million in 2005 to
$3.7 million in 2006.

Michael J. Keough, president and chief executive officer of
Caraustar, commented, "On a look-through basis, after adjustments
for restructuring and other costs, we view our performance as
slightly ahead of expectations.  Volume improved for uncoated
recycled grades as Caraustar was up about 6 thousand tons.  Our
paperboard mills operated at 95.7% in the second quarter of 2006,
up from 93.0% a year ago, but down when compared to 96.9% for the
first quarter 2006.  Pricing is improving but still lags input
cost increases.  Recently announced price increases should
positively impact the third quarter.

"In the second quarter 2006, we consolidated our tube and core and
custom packaging businesses into the Converted Products Group and
have redirected our focus to make this business more efficient and
effective in serving customers.  There were write-offs this
quarter of non-strategic assets with this change in operating
philosophy, and we continue to evaluate the impact of
consolidating these businesses.

"Subsequent to quarter end, we completed the sale of our Sprague
Paperboard mill to Cascades, Inc. for $14.5 million and applied
the proceeds to our revolving line of credit. This transaction and
the continuing negotiations for the sale of Caraustar's other two
coated recycled boxboard mills and the contract packaging business
are part of the company's previously announced decision to exit
non-core businesses."

                          Liquidity

The company ended the second quarter with a cash balance of
$7.4 million compared to $86.7 million at the end of second
quarter of 2005 and $300.4 million at March 31, 2006.  For the six
months ended June 30, 2006, the company used $3.6 million of cash
in operating activities versus providing $7.4 million for the same
period last year.  The decrease is primarily the result of lower
income from continuing operations and an $11.5 million decrease in
distributions from unconsolidated affiliates, due to the sale of
Standard Gypsum.  Capital expenditures were $15.8 million for the
six months ended June 30, 2006 versus $11.6 million for the same
period a year ago.  The increase was due to $2.7 million in higher
ERP investment and $1.7 million associated with the sale of the
partition business in the first quarter 2006.

The company had $49.0 million in drawn borrowings outstanding
under its $145 million senior secured credit facility and had
$12.6 million in letters of credit outstanding.  Subsequent to
June 30, 2006, the company repaid $15.0 million of the $49.0
million outstanding under its senior secured credit facility.

Caraustar Industries, Inc. (Nasdaq: CSAR) --
http://www.caraustar.com/-- is a recycled packaging company.  The  
Company is an integrated manufacturers of converted recycled
paperboard and is dedicated to providing customers with
outstanding value through innovative products and services.
Caraustar has developed its leadership position in the industry
through diversification and integration from raw materials to
finished products.  Caraustar serves the four principal recycled
boxboard product end- use markets: tubes, cores and composite
cans; folding cartons; gypsum facing paper and miscellaneous other
specialty paperboard products.

                          *     *     *

The Company's $200 million 7.375% Senior Notes due June 1, 2009
and $29 million 7.25% Senior Notes due May 1, 2010, carry Standard
& Poor's B+ rating.  The Company's $285 million 9.875% Senior
Subordinated Notes due April 1, 2011, carry S&P's B- rating.  
Those ratings were assigned on May 9, 2006.


CARL YECKEL: Ch. 7 Trustee Wants Rule 2004 Test On Debtor & Spouse
------------------------------------------------------------------
James W. Cunningham, the chapter 7 trustee liquidating Carl
Yeckel's bankruptcy estate, asks the U.S. Bankruptcy Court for the
Northern District of Texas in Dallas, for authority to examine and
get depositions from Carl L. Yeckel and his non-filing spouse,
Susan M. Yeckel under Rules 2004, 9014, and 7030 under the Federal
Rules of Bankruptcy Procedures.

The Chapter 7 Trustee wants to inspect and appraise the real
estate,  its improvements, and personal property located at 3900
Marquette in Dallas, Texas, and the personal property in storage
facilities and safety deposit boxes rented or used by the Debtor.

The Chapter 7 Trustee has already made multiple requests to
inspect the real and personal properties but was hindered by the
Debtor's delay and objections from Mrs. Yeckel.

The Chapter 7 Trustee said that at present the Debtor has no
objection to the inspection but his spouse still has objections
and is unwilling to agree.  

In addition, the Debtor and his spouse rent or use one or more
storage facilities where they store personal property but they
have not provided a complete inventory of those properties nor a
complete list of those facilities nor the number of safe deposit
boxes.

The Chapter 7 Trustee said he requires additional information on
the nature and extent of the Debtor's property and the basis and
extent of the non-filing spouse's claim of separate property.

Residing in Dallas, Texas, Carl Yeckel filed for chapter 11
protection on August 12, 2005 (Bankr. N.D. Tex. Case No.
05-39136).  Eric A. Liepins, Esq., at Eric A. Liepins, P.C.,
in Dallas, Texas, represented the Debtor.  When the Debtor filed
for protection from his creditors, he estimated assets between
$1 million to $10 million and debts between $10 million to
$50 million.  On Nov. 3, 2005, the Court converted the Debtor's
chapter 11 case to a chapter 7 liquidation.  James W. Cunningham
is the Chapter 7 Trustee for Carl Yeckel's bankruptcy estate and
is represented by Charles Brackett Hendricks, Esq., at Cavazos,
Hendricks & Poirot, P.C.


CENDANT CORP: Moody's Downgrades then Withdraws Ratings
-------------------------------------------------------
Moody's Investors Service downgraded and will withdraw the ratings
of Cendant's $250 million of 7.125% Senior Notes due 2015,
$350 million of 6.25% Senior Notes due 2010, $1,200 of 7.375% due
2013, and $800 million of 6.25% Senior Notes due 2008 to B2 from
Baa1.  Moody's will withdraw these ratings for business reasons.

Approximately 97% of these bonds were tendered for repayment
pursuant to the Cendant's tender offers and consent solicitations.  
Pursuant to its separation plan, Cendant is expected to receive
cash dividends from the spin-off of Wyndham Worldwide Corporation
and Realogy Corporation that will be used repay the aforementioned
bond tenders.

The downgrade reflects the structural subordination of the bonds
that will remain oustanding to the debt that resides at the
operating company, as well as elimination of certain covenants,
including substantially all of the restrictive covenants, and
certain Events of Default, among others, that were approved as
part of the company's tender offer and consent solicitation that
expired yesterday.

The bonds will continue to be the obligation of Cendant
Corporation and are structurally subordinate to the debt that
resides at the operating company, Avis Budget Car Rental, LLC.   
Cendant Corporation is the holding company of the vehicle rental
business operated by its wholly owned indirect subsidiary, Avis
Budget Car Rental, LLC that has a corporate family, and senior
unsecured rating of Ba2 and Ba3, respectively.

Moody's affirmed the Baa1 rating of Cendant's $100 million of
4.89% notes and $850 million of 6.875% notes each due August 2006.  
Cendant is pre-funding via an irrevocable deposit with the bond
trustee sufficient cash to discharge its principal and interest
obligations on these senior notes at their respective maturity
dates.  The rating outlook has changed to stable from developing.

Moody's is withdrawing the ratings on Cendant's senior unsecured
(P) Baa1, subordinated (P) Baa2 and preferred (P) Baa3 debt
shelf, as well as its Prime-2 commercial paper rating.

Moody's last rating action occurred on October 24, 2005 when
Cendant's Baa1 senior unsecured ratings were affirmed and the
rating outlook was changed to developing from stable.

Cendant Corporation is a leading provider of real estate, rental
car, timeshare and travel services to consumers and businesses.


CENTEX CORP: Earns $160.2 Million in Fiscal 2006 First Quarter
--------------------------------------------------------------
Centex Corporation disclosed results for the first quarter ended
June 30, 2006.

Highlights of the quarter ended June 30, 2006 (compared to last
year's first quarter):

   * Home closings increased 1% to 8,318;

   * Revenues grew 13% to $3.27 billion;

   * Home Building operating earnings decreased 17% to
     $281 million;

   * Earnings per diluted share from continuing operations
     declined 11% to $1.39; and

   * Unit backlog declined 17% on a decrease in sales (orders)
     of 21%.

Centex Corp. reported $160,257,000 of net income on $3,273,423,000
of total revenues for the first quarter ended June 30, 2006,
compared with $233,670,000 of net income on $2,899,910,000 of
total revenues for the same period in 2005.

At June 30, 2006, the Company's balance sheet showed
$21,773,000,000 in total assets, $16,328,000,000 in total
liabilities, $422,000,000 in minority interests, and
$5,023,000,000 in total stockholders' equity.

"We have responded to the significant variations in local market
conditions with a strategy that balances sales pace with margin
performance, and this is reflected in our results for our first
fiscal quarter of 2007," Tim Eller, Centex Corporation chairman
and chief executive officer, said.

"We are placing emphasis on the development of balance sheet
capacity over growth in our land position.  This investment
capacity, along with our geographic and segment diversification,
will enable us to capitalize on growth and consolidation
opportunities as individual markets rebound."

                           Home Building

Fiscal 2007's first quarter revenues were $2.65 billion,
10% higher than the same quarter last year.  Operating earnings
were $281 million for the quarter, 17% lower than the same quarter
a year ago.

The 17% decrease in operating earnings reflected a 360 basis point
decline in total home building operating margin in this year's
first quarter, a 1% increase in closings to 8,318 homes and an
8% increase in the average sales prices of homes delivered.

The total home building operating margin, including land sales,
was 10.6% mainly due to a 260 basis point decline in housing
operating margin, primarily related to increased sales incentives.  
Also affecting the home building operating margin was a
$23 million loss from land related operations, including the write
off of $36 million of option deposits and pre-acquisition costs.

                         Other Businesses

A.  Financial Services

Operating earnings from Financial Services totaled $23 million for
the first quarter of fiscal 2007, 9% higher than the same quarter
a year ago.  CTX Mortgage originated loans for 77% of Centex
Homes' buyers during the first quarter, up two percentage points
versus last year's first quarter.  Centex's Financial Services
operations provide Centex homebuyers with a streamlined
home-closing and settlement process, key to ensuring customer
satisfaction and quality.

B.  Construction Services

Operating earnings from Construction Services were $7 million for
the first quarter this year, resulting in an operating margin of
1.4%, up 62 basis points from last year's first quarter.  New
contracts for the quarter were approximately $442 million,
increasing the backlog of uncompleted construction contracts at
June 30, 2006 to $2.90 billion, 23% more than a year ago.

                      Additional Developments

Centex Corporation completed the sale of its sub- prime home
equity lending operation, Centex Home Equity Company, LLC (CHEC)
to an affiliate of Fortress Investment Group, LLC.  Centex
estimates total, net after-tax proceeds will approximate
$540 million, subject to certain ordinary post-closing
adjustments.  The purchase price consisted of a payment based on
the book value of the company, plus a premium calculated in
accordance with agreed upon procedures.  Additionally, Centex has
the potential to receive an additional payment based on the volume
of mortgage loans originated by CHEC during the two-year period
after the closing.

In the first fiscal quarter, Centex repurchased 3,500,000 shares
at an average price of $53.46 per share.  Additionally, since
July 1, 2006, the company repurchased another 1,000,000 shares at
an average price of $50.80.  There are 10,000,000 shares remaining
in the current repurchase authorization.

                              Outlook

Taking into consideration its current backlog and the uncertainty
of the current housing market conditions, Centex's full year 2007
earnings guidance is now $7.00 per fully diluted share from
continuing operations.  Additionally, Centex's guidance for its
second fiscal quarter ending Sept. 30, 2006, is $1.40 per fully
diluted share from continuing operations.

Despite the supply-driven correction occurring now, the company
believes that the fundamentals driving industry demand remain
strong and that Centex is poised to extend its leadership position
in key markets in this environment.

Headquartered in Dallas, Texas, Centex Corp. (NYSE: CTX) --
http://www.centex.com/-- is a home building company that operates  
in major U.S. markets in 25 states.  In addition to its home
building operations, the Company's related business lines include
mortgage and financial services, home services and commercial
construction.

                         *     *     *

Centex Corp.'s preferred stock carries Moody's Investors Service's
Ba1 rating.


CHI-CHI'S: William Kaye Wants Until Nov. 22 to Object to Claims  
---------------------------------------------------------------
William Kaye, the Liquidating Trustee for the Liquidating Trust
established pursuant to Chi-Chi's, Inc., and its debtor-
affiliates' confirmed plan of reorganization, asks the U.S.
Bankruptcy Court for the District of Delaware to extend until
Nov. 22, 2006, the time within which he can file objections to
claims.

Mr. Kaye believes that the extension is necessary to save judicial
resources and avoid litigation of disputed claims that can be
resolved through negotiation.

Without the extension, Mr. Kaye says, the Debtors' creditors may
suffer unfair prejudice, either due to the potential loss of the
Liquidating Trustee's right to object to, and potentially reduce,
the amount of claims, or by the Liquidating Trustee's premature
objection to claims before they are fully reviewed and analyzed by
the Liquidating Trustee and his professionals.

Headquartered in Irvine California, Chi-Chi's, Inc., is a direct
or indirect operating subsidiary of Prandium and FRI-MRD
Corporation and each engages in the restaurant business.  The
Debtors filed for chapter 11 protection on October 8, 2003 (Bankr.
Del. Case No. 03-13063-CGC).  Bruce Grohsgal, Esq., Laura Davis
Jones, Esq., Rachel Lowy Werkheiser, Esq., and Sandra Gail McLamb,
Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C.,
represent the Debtors.  Lawyers at Jaspan Schlesinger Hoffman LLP,
represent the Official Committee of Unsecured Creditors.  

The Court confirmed the Debtors' First Amended Plan of Liquidation
on Dec. 15, 2005.  The Plan became effective on Dec. 27, 2005.  
The Chi-Chi's Liquidating Trust was created under the Plan as the
Debtors' successor-in-interest.  William Kaye was appointed at
trustee for the Liquidating Trust.  When the Debtor filed for
bankruptcy, it estimated $50 to $100 million in assets and more
than $100 million in liabilities.


COLLINS & AIKMAN: Drops Adversary Proceeding Against GE Capital
---------------------------------------------------------------
Collins & Aikman Corporation and its debtor-affiliates voluntarily
dismiss without prejudice the adversary proceeding they commenced
against General Electric Capital Corporation and GE Capital de
Mexico, S. de R. L. de C.V., pursuant to Rule 41(a)(1) of the
Federal Rules of Civil Procedure, made applicable by Rule 7041 of
the Federal Rules of Bankruptcy Procedure.

The Debtors are currently engaged in settlement discussions with
GECC and GE Capital de Mexico and hope to work through a business
resolution of the issues related to the adversary proceeding.

As reported in the Troubled Company Reporter on June 27, 2006, the
Debtors asked the Court to enjoin GECC and GE Capital de Mexico
from commencing actions to foreclose on the assets, stock or other
property interests of Collins & Aikman Automotive Hermosillo, S.A.
de C.V., a non-Debtor subsidiary.

The GE Defendants have threatened to take action against C&A
Hermosillo.  If the Defendants are permitted to carry through on
their threats, the impact and results would surely be felt by, and
would be extremely harmful to, the Debtors and their
reorganization efforts, Marc J. Carmel, Esq., at Kirkland & Ellis
LLP, in Chicago, Illinois, explained.

Mr. Carmel contended that any attempt by the GE Defendants, during
the pendency of the Debtors' bankruptcy proceedings, to foreclose
on C&A Hermosillo or any assets, stock or other property interests
of the Debtors constitutes a violation of the automatic stay.

The C&A Hermosillo facility manufactures interior parts,
including instrument panels, door panels, center consoles and
carpets for Ford Motor Company.   It is the single largest
revenue-producing plant in the Debtors' entire family of
companies, earning approximately $300,000,000 in annual revenues.

GE Mexico, a special purpose vehicle, provides financing to equip
the C&A Hermosillo facility pursuant to a 2004 Construction
Agency Agreement and a Master Lease Agreement.

C&A Hermosillo has pledged its stock to GE Mexico under a Stock
Pledge Agreement to secure its obligations under the Construction
Agency Agreement and related agreements.  The Debtors also
guaranty C&A Hermosillo's payment and performance under the
agreements.

In a May 19, 2006 letter, the GE Defendants indicated that the
Debtors' bankruptcy filing constitutes an event of default under
the agreements.

Mr. Carmel noted that for a significant period of time, the
Debtors, C&A Hermosillo, and the GE Defendants entered into a
series of limited waiver agreements in which GE Mexico
temporarily waived its right to enforce various remedies against
the Debtors and C&A Hermosillo.  The last limited waiver expired
October 15, 2005, however, neither the Debtors nor C&A Hermosillo
heard anything from GECC or GE Mexico about their intent to seek
to enforce remedies against C&A Hermosillo.

GECC and GE Mexico's decision to wait more than one year from the
Petition Date, and more than seven months from the expiration of
the last limited waiver agreement, before threatening to take
action is not coincidental, according to Mr. Carmel.

Mr. Carmel said the issuance of the Notice of Termination and the
latest threats by GE Mexico against C&A Hermosillo were
orchestrated by GECC either as retaliation for the Debtors
commencing an action against GECC or as a means of applying
additional pressure on the Debtors in connection with the
unrelated adversary proceeding.

The Debtors commenced an adversary proceeding against GECC in
April 2006 to recharacterize a putative sale-leaseback arrangement
as a secured financing transaction.

Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit  
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems.  The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world.  The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927).  Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring.  Lazard Freres & Co., LLC,
provides the Debtor with investment banking services.  Michael S.
Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
the Official Committee of Unsecured Creditors Committee.  When the
Debtors filed for protection from their creditors, they listed
$3,196,700,000 in total assets and $2,856,600,000 in total debts.
(Collins & Aikman Bankruptcy News, Issue No. 35; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


COLLINS & AIKMAN: SEC Has Until August 31 to File Proofs of Claim
-----------------------------------------------------------------
Collins & Aikman Corporation, its debtor-affiliates and the
Securities and Exchange Commission agree, with the consent of the
U.S. Bankruptcy Court for the Eastern District of Michigan, to
further extend the SEC's deadline to file proofs of claim to
Aug. 31, 2006.

As reported in the Troubled Company Reporter on March 21, 2006,
the SEC is currently conducting an investigation of controls over
financial reporting and review of certain accounting issues of the
Debtors.  The SEC sought documents and information relating to the
company's financial statements for the fiscal years 2000-2005, as
well as documents and information pertaining to accounts
receivable, customer and/or supplier rebates and other matters.

Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit  
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems.  The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world.  The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927).  Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring.  Lazard Freres & Co., LLC,
provides the Debtor with investment banking services.  Michael S.
Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
the Official Committee of Unsecured Creditors Committee.  When the
Debtors filed for protection from their creditors, they listed
$3,196,700,000 in total assets and $2,856,600,000 in total debts.
(Collins & Aikman Bankruptcy News, Issue No. 35; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


COMCAST CORP: Posts $460 Mil. Net Income for Second Quarter 2006
----------------------------------------------------------------
Comcast Corporation's net income increased to $460 million in the
second quarter of 2006, compared to net income of $430 million in
the second quarter of 2005.

The Company's net income increased to $926 million in the six
months ended June 30, 2006 compared to net income of $573 million
in the prior year.  Strong results at Comcast Cable and a lower
tax rate contributed to the growth in net income on a year-to-date
basis.

Net Cash Provided by Operating Activities increased to
$3.2 billion for the six months ended June 30, 2006 from
$2.5 billion in 2005 due to stronger operating results and changes
in operating assets and liabilities.

Brian L. Roberts, Chairman and chief executive officer of Comcast
Corporation said, "Record results for the 2nd quarter highlight
the continued strength of our business and the power of our
connection to our customers.  This terrific performance included
another quarter of double digit revenue and Operating Cash Flow
growth and the highest level of second quarter RGU additions in
the Company's history.  In particular, the rapid growth of Comcast
Digital Voice demonstrates its massive appeal -- and we are just
getting started.  As we continue to roll out our triple play
offer, we are now more confident than ever that it represents a
meaningful engine for growth and a significant advantage over our
competition."

"Overall, these results demonstrate that our strategy of
delivering superior products and services to our customers is
working.  With a strong first half behind us, and significant
momentum propelling us forward, we see our growth accelerating and
are extremely optimistic about the remainder of 2006.  This
outlook is reflected in the increase in our 2006 guidance."

The Company's operating income increased 17% to $1.2 billion in
the second quarter of 2006 due to strong results at Comcast Cable.  
Similarly, strong results at Comcast Cable increased consolidated
operating income 19% to $2.3 billion for the six months ended
June 30, 2006.

                    Share Repurchase Program

The Company repurchased $685 million or 22 million shares of its
Class A Special Common Stock during the second quarter of 2006.
Remaining availability under its stock repurchase program is
$3.9 billion.

A full-text copy of Comcast Corp.'s Quarterly Report is available
for free at http://ResearchArchives.com/t/s?e93

Headquartered in Philadelphia, Pennsylvania, Comcast Corporation
(Nasdaq: CMCSA, CMCSK) -- http://www.comcast.com-- is a provider  
of cable, entertainment and communications products and services.  
With 21.7 million cable customers, 9.3 million high-speed Internet
customers, and 1.7 million voice customers, Comcast is principally
involved in the development, management and operation of broadband
cable networks and in the delivery of programming content.

The Company's content networks and investments include E!
Entertainment Television, Style Network, The Golf Channel, OLN,
G4, AZN Television, PBS KIDS Sprout, TV One and four regional
Comcast SportsNets. The Company also has a majority ownership in
Comcast-Spectacor, whose major holdings include the Philadelphia
Flyers NHL hockey team, the Philadelphia 76ers NBA basketball team
and two large multipurpose arenas in Philadelphia.

                          *     *     *

Comcast Corp.'s preferred stock carry Moody's Investors Service's
Ba1 Rating.


COMPLETE RETREATS: Selects Dechert LLP as Bankruptcy Counsel
------------------------------------------------------------
Complete Retreats LLC and its debtor-affiliates ask permission
from the U.S. Bankruptcy Court for the District of Connecticut
to employ Dechert LLP as their bankruptcy and restructuring
attorneys.

Dechert is expected to:

    (a) provide legal advice with respect to the Debtors' powers
        and duties as debtors-in-possession in the continued
        operation of their business and management of their
        properties;

    (b) take all necessary actions to protect and preserve the
        Debtors' estates;

    (c) prepare all necessary motions, applications, answers,
        proposed orders, reports, and other papers in connection
        with the administration of the Debtors' estates;

    (d) negotiate and draft any agreements for the provision of
        financing to the Debtors;

    (e) negotiate and draft any agreements for the sale or
        purchase of any assets of the Debtors, if appropriate;

    (f) negotiate and draft a plan of reorganization and all
        other related documents;

    (g) take all steps necessary to confirm and implement a plan
        of reorganization; and

    (h) perform all other necessary and appropriate legal
        services in connection with the prosecution of the
        bankruptcy cases.

Mr. McGrath contends that because of the size and complexity of
the Debtors' business and the transactions that are likely to
arise in the Chapter 11 proceedings, the Debtors will need the
services of Dechert in the performance of their duties.

Dechert will charge the Debtors on an hourly basis in accordance
with its ordinary and customary rates:

    Designation          Hourly Rate  
    -----------          -----------
    Attorneys            $250 to $825
    Paralegals           $145 to $220

Joel H. Levitin, Esq., a partner at Dechert LLP, assures the
Court that his firm is competent to represent the interests of
the Debtors, and has not and will not represent any shareholder,
director, officer, lender, creditor, or equity holder of the
Debtors in any matter related to the bankruptcy cases.

Dechert does not represent any interest adverse to the estates of
the Debtors, their creditors, or any other parties-in-interest,
Mr. Levitin attests.

Mr. Levitin further assures the Court that Dechert is a
"disinterested person," as referenced in Section 327 of the
Bankruptcy Code and as defined in Sections 101(14) and 1107(b) of
the Bankruptcy Code.

                        U.S. Trustee Objects

According to the United States Trustee, retention applications
are not first day matters and if they are heard at all, only
interim relief should be granted.  If the Court decides to
conduct a hearing on the retention application, then Dechert
should comply with Rule 2014 of the Federal Rules of Bankruptcy
Procedure in its entirety, the U.S. Trustee asserts.

The U.S. Trustee asks the Court to require Dechert to provide
these additional disclosures:

    (a) a supplemental affidavit identifying:

        * each request for payment issued within 120 days before
          the filing of the petition;

        * the time period covered by each identified request for
          payment; and

        * both the date and amount of any payment received within
          90 days before the Debtors' bankruptcy filing.

    (b) a supplemented Levitin Affidavit, which provides more
        detail including, but not limited to, the percentage of
        revenues of each of the clients listed for the year
        before the Debtors' bankruptcy filing.

        To the extent that any of the creditors listed in the
        Affidavit exceed 1% of the firm's annual revenue, then
        the Debtors must retain a conflicts counsel, the U.S.
        Trustee says.  The application to retain conflicts
        counsel must be filed prior to the entry of a final order
        approving Dechert's retention; and

    (c) clarify, in a separate affidavit:

        * whether it can be adverse to any of the parties listed
          in the Levitin Affidavit;

        * that it received funds for its postpetition retainer
          prepetition;

        * where it is holding the funds; and

        * whether it intends to apply the retainer to the first
          fee application.

                     About Complete Retreats

Headquartered in Westport, Connecticut, Complete Retreats LLC
operates five-star hospitality and real estate management
businesses.  In addition to its mainline destination club
business, the Debtor also operates an air travel program for
destination club members, a villa business, luxury car rental
services, wine sales services, fine art sales program, and other
amenity programs for members.  Complete Retreats and its debtor-
affiliates filed for chapter 11 protection on July 23, 2006
(Bankr. D. Conn. Case No. 06-50245).  Nicholas H. Mancuso, Esq.
and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in
their restructuring efforts.  No estimated assets have been listed
in the Debtors' schedules, however, the Debtors disclosed
$308,000,000 in total debts.  (Complete Retreats Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000).


COMPLETE RETREATS: Taps XRoads Solutions as Restructuring Advisor
-----------------------------------------------------------------
Complete Retreats LLC and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Connecticut for authority
to employ XRoads Solutions Group LLC as their financial and
restructuring advisor.

In late June 2006, the Debtors hired XRoads Solutions to assist
them in the management of their business and in the exploration of
strategic alternatives.

In a retention letter dated July 20, 2006, the Debtors proposed
to continue XRoads' employment as their financial and
restructuring advisor.

Holly Felder Etlin, a principal at XRoads, has agreed to serve as
the Debtors' Chief Restructuring Officer during the course of the
Chapter 11 cases.  Ms. Etlin provides a fresh perspective on
their business, the Debtors tell the Court, as well as valuable
expertise on various business management and restructuring
issues.

The Debtors relate that they are familiar with the professional
standing and reputation of XRoads and that XRoads is well
qualified to advise them during the bankruptcy proceedings.

Pursuant to the Retention Letter, XRoads will continue to:

    (a) provide the services of Ms. Etlin, as well as other
        supporting personnel;

    (b) develop, refine, implement, and monitor the Debtors'
        turnaround efforts;

    (c) evaluate the Debtors' strategic alternatives;

    (d) assist in implementing any approved capital structure;

    (e) review, assess and develop action plans of key contracts;

    (f) review and validate the Debtors' cash flow forecasts and
        related processes;

    (g) evaluate the Debtors' business plan;

    (h) assist in the development and implementation of a
        recapitalization plan;

    (i) provide financial information in support of, and
        participation in, the Debtors' investment banking
        process;

    (j) assist in communications with, negotiations with, and
        presentations to vendors, creditors, and other key
        constituents of the Debtors;

    (k) assist in the development of employee-related plans;

    (l) assume the leadership role for the design and
        implementation of new effective management and financial
        reporting methodologies for the Debtors' business; and

    (m) analyze and lead the Debtors' cash management and related
        activities.

In addition, XRoads Case Management Services, LLC, an affiliate
of XRoads, will provide bankruptcy case support, administrative
and noticing services to the Debtors, Ms. Etlin informs the
Court.

XRoads will charge the Debtors a fixed minimum fee of $150,000
per month, provided that if their services total more than 480
hours, the Debtors will pay XRoads $375 per excess hour.

If any Restructurings are consummated during the term of their
engagement and 12 months after the termination of their services,
XRoads will receive a transaction fee equal to:

    (a) 0.5% of the first $100,000,000 in cumulative face value
        of the Debtors' debt securities or other indebtedness,
        obligations, or liabilities restructured; and

    (b) 0.25% of all amounts in excess of $100,000,000 in face
        value of the Debtors' cumulative debt securities or other
        indebtedness, obligations, or liabilities restructured.

If any Sale Transactions are consummated during the term of their
engagement and 12 months after the termination of their services,
XRoads will receive a performance fee equal to:

    (a) 0.5% of the first $100,000,000 of Aggregate Gross
        Consideration paid; and

    (b) 0.25% of the Aggregate Gross Consideration paid in excess
        of $100,000,000.

Ms. Etlin assures the Court that XRoads has not been retained to
assist any entity or person other than the Debtors on matters
relating to the bankruptcy proceedings.

XRoads is disinterested, as defined in Section 101(14) of the
Bankruptcy Code, Ms. Etlin affirms, and does not hold or
represent an interest adverse to the Debtors or their estates.

                        U.S. Trustee Objects

Pursuant to Sections 101(31)(B)(ii) and (iii) of the Bankruptcy
Code, officers of debtors are insiders.

Pursuant to Section 101(14)(A) of the Bankruptcy Code, insiders
are not disinterested.

The United States Trustee argues that since XRoads Principal
Holly Felder Etlin will act as the Debtors' CRO, she is not
disinterested, and thus cannot be retained under Section 327 of
the Bankruptcy Code.

In addition, because other XRoads employees will serve as
"supporting personnel" for Ms. Etlin, the firm is not
disinterested, the U.S. Trustee asserts.

Accordingly, the U.S. Trustee asks the Court to deny the Debtors'
application.

                     About Complete Retreats

Headquartered in Westport, Connecticut, Complete Retreats LLC
operates five-star hospitality and real estate management
businesses.  In addition to its mainline destination club
business, the Debtor also operates an air travel program for
destination club members, a villa business, luxury car rental
services, wine sales services, fine art sales program, and other
amenity programs for members.  Complete Retreats and its debtor-
affiliates filed for chapter 11 protection on July 23, 2006
(Bankr. D. Conn. Case No. 06-50245).  Nicholas H. Mancuso, Esq.
and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in
their restructuring efforts.  No estimated assets have been listed
in the Debtors' schedules, however, the Debtors disclosed
$308,000,000 in total debts.  (Complete Retreats Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000).


CONEXANT SYSTEMS: Reports $67.1 Mil. Third Quarter 2006 Net Loss
----------------------------------------------------------------
Conexant Systems, Inc., reported a $67.1 million net loss for the
third quarter ended June 30, 2006.

For the three months ended June 30, 2006, the Company disclosed a
$67.1 million net loss on $251.6 million of net revenues, compared
to a $10.1 million net loss on $242.6 million of net revenues for
the quarter ended March 31, 2006.

As of June 30, 2006, the Company's balance sheet showed total
assets of $1.6 billion and total liabilities of $1.1 billion.

"We entered the third fiscal quarter with $595 million in cash,
cash equivalents, and investments," Dwight W. Decker, Conexant
chairman and chief executive officer said.  "During the quarter,
we redeemed $197 million of convertible notes that had reached
maturity, and we paid $70 million to settle our litigation with
Texas Instruments.  These reductions to our cash and equivalents
were partially offset by $49 million in net proceeds from the
exercise of a 'green shoe' option related to our $200 million
convertible debt offering that we completed in the second fiscal
quarter.

"We exited the third fiscal quarter with $366 million in cash,
cash equivalents, and investments," Mr. Decker continued.  
"Conexant has $456.5 million of convertible debt coming due in
February 2007, and we expect that an additional financing will be
required before the end of the calendar year.  We anticipate that
the size of this financing will range between $100 million and
$200 million,"

"In total, we anticipate that Conexant's fourth fiscal quarter
revenues will be in a range from up 1 percent to down 3 percent
sequentially," Mr. Decker said.  "For gross margins, we expect to
continue our improvement trend with an increase in core gross
margins of about 50 basis points.  We also plan to continue to
modestly grow our investments in new Broadband Media Processing
and DSL products, which will increase core operating expenses
slightly.  We anticipate that core operating income will be in a
range between flat to down $4 million sequentially,"

A full-text copy of Conexant Systems' Quarterly Report is
available for free at http://ResearchArchives.com/t/s?e95

Headquartered in Newport Beach, California, Conexant Systems, Inc.
(NASDAQ: CNXT) -- http://www.conexant.com/-- is a fables  
semiconductor company.  The company has approximately 2,400
employees worldwide.

                         *     *     *

As reported in the Troubled Company Reporter on Dec. 20, 2004,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Newport Beach, California-based Conexant Systems, Inc.,
to 'B-' from 'B' on projections of sharply reduced sales and
profitability over the next few quarters.  The outlook is
negative.


COVAD COMMS: Earns $12.5 Million in Second Quarter of 2006
----------------------------------------------------------
Covad Communications Group, Inc., surpassed its guidance for
Adjusted EBITDA.  For the second quarter of 2006, Covad reported
net revenues of $118.5 million, Adjusted EBITDA of $25.6 million
and net income of $12.5 million.  Adjusted EBITDA and net income
for the second quarter of 2006 include a $19.5 million benefit
from a one-time tax adjustment.

"In the second quarter we grew revenues and effectively managed
costs across our business.  We continue to successfully focus on
providing high-margin, high-value solutions to direct business
customers," Charles Hoffman, Covad president and chief executive
officer, said.

"We also made significant strides towards ensuring our future
success with several growth opportunities.  Our build-out of what
will be the nation's largest next-generation network is well
underway and will enable us to meet the ongoing telecommunications
needs of our customers with unique product offerings such as
higher-speed broadband, line-powered voice access and other next-
generation communications services.  We also solidified our
position as an innovative leader in the wireless broadband space.
As always, we continued to focus on providing an excellent
customer experience, growing our business and improving
profitability."

                   Summary of Financial Results

   -- Net revenues for the second quarter of 2006 totaled
      $118.5 million, an increase of 0.6% from the $117.8 million
      reported for the first quarter of 2006, and an increase of
      8.0% from the $109.7 million reported for the second quarter
      of 2005.  Second quarter of 2006 includes a full quarter of
      revenues for Covad's wireless business.  Net revenues for
      the first quarter of 2006 include $1.7 million from a
      software license agreement;

   -- Broadband and VoIP subscription revenues for the second
      quarter of 2006 totaled $102.9 million, an increase of 1.9%
      from the $101.0 million reported for the first quarter of
      2006, and an increase of 10.1% from the $93.5 million
      reported for the second quarter of 2005;

   -- Wholesale subscribers for the second quarter of 2006
      contributed $78.9 million of net revenues, or 66.6%, as
      compared with $81.1 million, or 68.9%, for the first quarter
      of 2006, and $78.1 million, or 71.1%, for the second quarter
      of 2005.  Direct subscribers for the second quarter of 2006
      contributed $39.6 million of net revenues, or 33.4%, as
      compared with $36.7 million, or 31.1%, for the first quarter
      of 2006, and $31.6 million, or 28.9%, for the second quarter
      of 2005;

   -- Business subscribers for the second quarter of 2006
      contributed $90.5 million of net revenues, or 76.4%, as
      compared with $87.5 million, or 74.3%, for the first quarter
      of 2006, and $81.5 million, or 74.3%, for the second quarter
      of 2005.  Consumer subscribers for the second quarter of
      2006 contributed $28.0 million of net revenues, or 23.6%, as
      compared with $30.3 million, or 25.7%, for the first quarter
      of 2006, and $28.2 million, or 25.7%, for the second quarter
      of 2005;

   -- Income from operations for the second quarter of 2006
      totaled $14.1 million, an improvement of $23.1 million from
      the $9.0 million loss reported for the first quarter of
      2006, and an improvement of $39.7 million from the
      $25.6 million loss reported for the second quarter of 2005;

   -- Adjusted earnings before interest, taxes, depreciation and
      amortization, or A-EBITDA, for the second quarter of 2006
      totaled $25.6 million, an improvement of $22.8 million from
      the $2.8 million A-EBITDA reported for the first quarter of
      2006, and an improvement of $33.6 million from the
      $8.0 million EBITDA loss reported for the second quarter of
      2005. The second quarter of 2006 includes the benefit of a
      one-time tax adjustment that contributed approximately
      $19.5 million to Covad's A-EBITDA.  This adjustment stems
      from a ruling the IRS made in the second quarter of 2006 in
      which it will stop collecting the federal excise tax for
      certain classes of telecommunications services.  Covad had
      accrued for this tax from 2000 until early 2004.  Covad did
      not pass this tax onto its customers; consequently it
      charged the expense to its operations.  The ruling enables
      Covad to release this accrual as the ruling resolved
      uncertainty around the applicability of the tax to certain
      telecommunication services.  In addition, A-EBITDA for the
      second quarter of 2006 includes a $2.1 million benefit from
      an employment related tax adjustment.  A-EBITDA for the
      first quarter of 2006 includes a $1.7 million benefit from a
      software license agreement;

   -- Net income for the second quarter of 2006 totaled
      $12.5 million an improvement of $21.8 million from the
      $9.3 million net loss reported for the first quarter of 2006
      and an improvement of $28.9 million from the $16.4 million
      net loss reported for the second quarter of 2005.  Second
      quarter of 2006 results include a $19.5 million benefit from
      a one-time tax adjustment.  First quarter of 2006 includes a
      $1.7 million benefit from a software license agreement.
      Included in net loss for the second quarter of 2005 is a
      $9.4 million net gain from the sale of part of Covad's
      investment in ACCA Networks Co. Ltd, a Japanese broadband
      provider.  Excluding these items, net loss for second
      quarter of 2006, first quarter of 2006 and second quarter of
      2005 would have been $7.0 million, $11.0 million and
      $25.8 million, respectively; and

   -- Cash, cash equivalents and short-term investment balances,
      including restricted cash and investments, at the end of the
      second quarter of 2006 totaled $95.3 million, a decrease of
      $45.0 million when compared to the balance of $140.3 million
      at the end of the first quarter of 2006. Included in the
      total net cash usage for the second quarter of 2006 are:

      (a) a $33.6 million payment related to the redemption of
          Covad's secured collateralized customer deposit with
          AT&T,

      (b) $11.6 million of expenditures related to the build-out
          of Covad's LPVA platform, which are being funded with
          the proceeds from the strategic agreement with
          EarthLink, and

      (c) a $6.1 million inflow from Covad's line of credit.
          Excluding these transactions, Covad's cash usage for the
          second quarter of 2006 was $5.9 million.

"As we execute our growth and operational strategy we continue to
see improving financial results," Christopher Dunn, Covad's chief
financial officer, said.

"The action we have taken over the past few quarters to improve
our balance sheet, execute towards profitability and invest in our
next-generation network capabilities puts Covad in an excellent
position for the future."

                       Operating Statistics

   -- Broadband lines in service at the end of the second quarter
      of 2006 were approximately 548,000, a 1.1% decrease from the
      second quarter of 2005.  While total broadband lines in
      service decreased by 1.6% from the first quarter of 2006,
      business broadband lines in service increased by 3,600, or
      1.5%, to 238,100.  VoIP business customers at the end of the
      second quarter of 2006 were 1,343, a 1.1% increase from the
      first quarter of 2006 and a 54.4% increase from the second
      quarter of 2005.  VoIP stations at the end of the second
      quarter of 2006 were approximately 44,000, a 2.8% increase
      from the first quarter of 2006 and a 46.9% increase from the
      second quarter of 2005.  The customer and stations counts
      reflect an exit in the second quarter of 2006 from the
      Wholesale VoIP business where the company transitioned
      service for 170 Wholesale VoIP customers comprising 3,257
      stations.  Covad expects direct VoIP business customer
      growth to continue at previous quarter levels;

   -- Broadband lines in service at the end of the second quarter
      of 2006 were approximately 469,900, or 85.8%, wholesale and
      78,100, or 14.2%, direct, as compared to approximately
      478,400, or 85.9%, wholesale and 78,500, or 14.1%, direct at
      the end of the first quarter of 2006, and approximately
      472,800, or 85.3%, wholesale and 81,600, or 14.7%, direct at
      the end of the second quarter of 2005;

   -- Broadband lines in service at the end of the second quarter
      of 2006 were approximately 309,900, or 56.6%, consumer and
      238,100, or 43.4%, business, as compared to approximately
      322,400, or 57.9%, consumer and 234,500, or 42.1%, business
      at the end of the first quarter of 2006, and approximately
      324,700, or 58.6%, consumer and 229,700, or 41.4%, business
      at the end of the second quarter of 2005;

   -- Weighted average revenue per user, or ARPU, for broadband
      lines in service for the second quarter of 2006 was $56 per
      month, same as the first quarter of 2006, and up from
      $55 for the second quarter of 2005.  VoIP ARPU, excluding
      resellers, was $1,668 per month for the second quarter of
      2006, down from $1,900 for the first quarter of 2006, and
      down from $1,698 for the second quarter of 2005; and

   -- Net customer disconnections, or churn, for broadband lines
      averaged approximately 3.0% in the second quarter of 2006,
      up from 2.9% for the first quarter of 2006, and down from
      3.2% for the second quarter of 2005.

                         Business Outlook
               For Third Quarter and Full-Year 2006

For the third quarter of 2006, Covad expects:

   -- Net revenues in the range of $119.0 to $122.0 million;

   -- A-EBITDA in the range of $5.0 to $8.0 million, excluding
      LPVA project operating expenses of approximately
      $3.5 million;

   -- Net loss in the range of $8.8 to $13.0 million;

   -- Net usage of cash, cash equivalents and short-term
      investments, including restricted cash and investments in
      the range of negative $2.0 to $5.0, excluding LPVA project
      cash usage of negative $15.0 to $20.0.

For the Full-Year 2006, Covad expects:

   -- Net revenues in the range of $475.0 to $485.0 million;

   -- A-EBITDA in the range of $44.0 to $50.0 million, excluding
      LPVA project operating expenses of approximately
      $7.0 million.  A-EBITDA includes the benefit of a
      one-time tax adjustment that contributed approximately
      $19.5 million to A-EBITDA; and

   -- Net loss in the range of $9.5 to 19.5 million.

Covad Communications Group, Inc. (AMEX:DVW) --
http://www.covad.com/-- provides broadband voice and data  
communications.  The company offers DSL, Voice over IP, T1, Web
hosting, managed security, IP and dial-up, and bundled voice and
data services directly through Covad's network and through
Internet Service Providers, value-added resellers,
telecommunications carriers and affinity groups to small and
medium-sized businesses and home users.  Covad broadband services
are currently available across the nation in 44 states and 235
Metropolitan Statistical Areas and can be purchased by more than
57 million homes and businesses, which represent over 50% of all
US homes and businesses.

Covad emerged from a chapter 11 restructuring in Dec. 2001 under a
plan of reorganization that swapped $1.4 billion of bond debt with
a combination of cash (about 19 cents-on-the-dollar) and a 15%
equity stake in the company.  Covad's prepetition shareholders
retained an approximate 80% equity interest in the company.

At June 30, 2006, Covad Communications' balance sheet showed
$16,189,000 in stockholders' equity compared with a $586,000
deficit at March 31, 2006, and a $20,169,000 deficit at
Dec. 31, 2005.

This report concludes the Troubled Company Reporter's coverage of
Covad Communications Group, Inc., until facts and circumstances,
if any, emerge that demonstrate financial or operational strain or
difficulty at a level sufficient to warrant renewed coverage.


CUMMINS INC: Posts $220 Mil. Net Earnings for Second Quarter 2006
-----------------------------------------------------------------
Cummins Inc. reported net earnings of $220 million on
$2.84 billion of sales in the second quarter of 2006.  The company
disclosed that net earnings rose 56% from $141 million in the same
period a year ago and sales increased 14% from $2.49 billion in
the same period in 2005.  Second-quarter net income includes
$28 million from the favorable resolution of tax audits related to
prior years.

As of July 2, 2006 the Company's balance sheet showed $7.3 billion
in total assets and total liabilities of $4.6 billion compared to
$6.9 billion in total assets and $4.8 billion in total liabilities
as of December 31, 2005.     

"We had a terrific second quarter and remain on pace for a record
2006," Cummins chairman and chief executive officer Tim Solso
said.  "Our markets are strong around most of the world, we are
winning new business and we continue to serve our customers well.

The Company further disclosed that it will increase its quarterly
dividend by 20% to 36 cents a share and that the Board of
Directors has authorized the repurchase of up to 2 million shares
of common stock.

Headquartered in Columbus, Indiana, Cummins Inc. (NYSE: CMI)
-- http://www.cummins.com/-- is a corporation of complementary  
business units that design, manufacture, distribute and service
engines and related technologies, including fuel systems,
controls, air handling, filtration, emission solutions and
electrical power generation systems.  Cummins serves customers in
more than 160 countries through its network of 550 Company-owned
and independent distributor facilities and more than 5,000 dealer
locations.

                         *     *     *

Cummins' Junior Convertible Subordinated Debentures carry Fitch's
'BB' rating with a stable outlook.

As reported in the Troubled Company Reporter on May 11, 2006,
Moody's Investors Service raised Cummins' convertible preferred
stock rating to Ba1 from Ba2 and withdrew the company's SGL-1
Speculative Grade Liquidity rating and its Ba1 Corporate Family
Rating.


DANA CORP: WESCO Wants Stay Lifted to Terminate Pacts with Dana
---------------------------------------------------------------
WESCO Distribution Inc. asks the U.S. Bankruptcy Court for the
Southern District of New York to modify the automatic stay
to permit it to exercise its rights to prevent the automatic
renewal of the agreements it entered into with Dana Corporation by
providing 90 days written notice to Dana and its debtor-affiliates
of its intention not to renew the Agreements.

On Sept. 14, 2003, Dana entered into:

   (1) a Maintenance, Repair and Operating Supplies Management
       Agreement United States with WESCO Distribution, Inc., and
       its division, Bruckner Supply; and

   (2) a Maintenance, Repair and Operating Supplies Management
       Agreement Canada with Bruckner, WESCO Distribution, and
       its Canadian subsidiary, WESCO Distribution Canada LP,
       formerly known as WESCO Distribution-Canada, Inc.

A full-text copy of MRO Management Agreement U.S. is available
for free at http://researcharchives.com/t/s?e6e

A full-text copy of MRO Management Agreement Canada is available
for free at http://ResearchArchives.com/t/s?e6f

The Agreements designate Bruckner as a preferred provider of
integrated supply services for the MRO products of Dana.  MRO
products are maintenance, repair, OEM and operating supplies.

The Agreements provide, among other things, that Bruckner is
obligated to purchase or source products or services for delivery
to Dana and that Dana is obligated to purchase requirements for
all products and services which Bruckner is to manage or supply.

The Agreements provide for a 36-month term, which automatically
renews from year to year, unless canceled.  The initial term of
each of the Agreements ends on September 13, 2006.

The Agreements also provide that either party may cancel the
Contracts for any or no reason, in whole or solely with respect
to a particular Dana location, upon 90 days' prior written notice
to the other party.

                      About Dana Corporation

Toledo, OH-based Dana Corp. -- http://www.dana.com/-- designs and  
manufactures products for every major vehicle producer in the
world, and supplies drivetrain, chassis, structural, and engine
technologies to those companies.  Dana employs 46,000 people in 28
countries.  Dana is focused on being an essential partner to
automotive, commercial, and off-highway vehicle customers, which
collectively produce more than 60 million vehicles annually.  The
company and its affiliates filed for chapter 11 protection on Mar.
3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354).  Corinne Ball, Esq.,
and Richard H. Engman, Esq., at Jones Day, in Manhattan and
Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black,
Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio,
represent the Debtors.  Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor and investment
banker.  Ted Stenger from AlixPartners serves as Dana's Chief
Restructuring Officer.  Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel LLP, represents the Official Committee of
Unsecured Creditors.  When the Debtors filed for protection from
their creditors, they listed $7.9 billion in assets and $6.8
billion in liabilities as of Sept. 30, 2005.  (Dana Corporation
Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service,
Inc., 215/945-7000).

The Debtors' consolidated balance sheet at March 31, 2006, showed
a $456,000,000 total shareholder' equity resulting from total
assets of $7,788,000,000 and total liabilities of $7,332,000,000.


DANA CORP: Asks Court to Bar WESCO from Terminating Agreements
--------------------------------------------------------------
Dana Corporation and its debtor-affiliates oppose WESCO
Distribution Inc.'s request to prevent the automatic renewal of
these agreements:

   (1) a Maintenance, Repair and Operating Supplies Management
       Agreement United States with WESCO Distribution, Inc., and
       its division, Bruckner Supply; and

   (2) a Maintenance, Repair and Operating Supplies Management
       Agreement Canada with Bruckner, WESCO Distribution, and
       its Canadian subsidiary, WESCO Distribution Canada LP,
       formerly known as WESCO Distribution-Canada, Inc.

The Debtors assert that WESCO's request is contrary to the terms
and purpose of Section 365(e)(1) of the Bankruptcy Code, which
prevents parties to executory contracts and unexpired leases from
terminating agreements with a debtor due to its bankruptcy filing
or financial condition.

According to Corinne Ball, Esq., at Jones Day, in New York,
WESCO's request "is driven by its concerns about the bankruptcy
filing of Debtor Dana Corporation."

Before the Debtors' bankruptcy filing, and despite a number of
prepetition difficulties, WESCO never sought to terminate the
Agreements, or even mentioned to Dana that it was considering
terminating the Agreements, Ms. Ball notes.

Ms. Ball argues that WESCO has offered no justification for its
decision to terminate the Agreements, other than stating that it
has the contractual right to do so.  Moreover, WESCO produced no
documents that provided any rationale or substantive basis for
its reason for terminating the Agreements.

WESCO is seeking to exercise a termination-for-convenience
clause, which courts have found to be in violation of Section
365(e)(1), Ms. Ball contends.

Granting WESCO's request would cause particular harm to the
Debtors' estates due to the integrated nature of WESCO's
operations with the Debtors and certain of the non-debtor
subsidiaries.  "The balance of the harms favors the Debtors and
supports the preservation of the Agreements."

Accordingly, the Debtors ask the U.S. Bankruptcy Court for the
Southern District of New York to deny WESCO's request.

                      About Dana Corporation

Toledo, OH-based Dana Corp. -- http://www.dana.com/-- designs and  
manufactures products for every major vehicle producer in the
world, and supplies drivetrain, chassis, structural, and engine
technologies to those companies.  Dana employs 46,000 people in 28
countries.  Dana is focused on being an essential partner to
automotive, commercial, and off-highway vehicle customers, which
collectively produce more than 60 million vehicles annually.  The
company and its affiliates filed for chapter 11 protection on Mar.
3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354).  Corinne Ball, Esq.,
and Richard H. Engman, Esq., at Jones Day, in Manhattan and
Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black,
Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio,
represent the Debtors.  Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor and investment
banker.  Ted Stenger from AlixPartners serves as Dana's Chief
Restructuring Officer.  Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel LLP, represents the Official Committee of
Unsecured Creditors.  When the Debtors filed for protection from
their creditors, they listed $7.9 billion in assets and $6.8
billion in liabilities as of Sept. 30, 2005.  (Dana Corporation
Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service,
Inc., 215/945-7000).

The Debtors' consolidated balance sheet at March 31, 2006, showed
a $456,000,000 total shareholder' equity resulting from total
assets of $7,788,000,000 and total liabilities of $7,332,000,000.


DEATH ROW: Committee Wants Pachulski Stang as Bankruptcy Counsel
----------------------------------------------------------------
The Official Committee of Unsecured Creditors of Death Row
Records, Inc., asks the U.S. Bankruptcy Court for the Central
District of California to employ Pachulski Stang Ziehl Young Jones
& Weintraub, L.L.P, as its bankruptcy counsel.

Pachulski Stang will:

     a) assist, advise and represent the Committee in its
        consultations with the Debtor regarding the
        administration of this case;

     b) assist, advise and represent the Committee in analyzing
        the Debtor's assets and liabilities, investigating the
        extent and validity of liens and participating in
        and reviewing any proposed asset sales, any asset
        disposition, financing arrangements and cash collateral
        stipulations or proceedings;

     c) assist, advise and represent the Committee in any manner
        relevant to reviewing and determining Debtor's rights and
        obligations under leases and other executory contracts;

     d) assist, advise and represent the Committee in connection
        with any review of management, compensation issues,
        analysis of retention or severance benefits, or other
        management related issues;

     e) assist, advise and represent the Committee in
        investigating the acts, conduct, assets, liabilities
        and financial condition of the Debtor, the operation of
        the Debtor's business and the desirability of the
        continuance of any portion of the business, and any
        other matters relevant to this case or to the formulation
        of a plan;

     f) assist, advise and represent the Committee in its
        participation in the negotiation, formulation and      
        drafting of a plan of liquidation or reorganization;
     
     g) provide advice to the Committee on the issues concerning
        the appointment of a trustee or examiner under Section
        1104 of the Bankruptcy Code;

     h) assist, advise and represent the Committee the
        performance of all of its duties and powers under
        Bankruptcy Code and the Bankruptcy Rules and in the
        performance of such other services as are in the interest
        of those represented by the Committee.

     i) assist, advise an represent the Committee in the
        evaluation of claims and on any litigation matters; and
      
     j) advise the Committee on issues regarding conflicts of
        interest.

Debra I. Grassgreen, Esq., a partner at Pachulski Stang, tells the
Court that she will bill $495 per hour for this engagement.  Ms.
Grassgreen says that J. Rudy Freeman, Esq., will also be rendering
services and bills at $350 per hour.

Ms. Grassgreen discloses that the firm's other professionals bill:

     Designations               Hourly Rate
     ------------               -----------
     Partners                   $375 - $675
     Of-counsel                 $325 - $445
     Associates                 $235 - $365
     Paralegal                  $120 - $185

Ms. Grassgreen assures the Court that her firm does not hold any
interest adverse to the Debtor or its estate.

Ms. Grassgreen can be reached at:

     Debra I. Grassgreen, Esq.
     Pachulski Stang Ziehl Young Jones & Weintraub, L.L.P.
     10100 Santa Monica Blvd., 11th Floor
     Los Angeles, California 90067-4100
     Tel: (310) 277-6910
     Fax: (310) 210-0760
     http://www.pszyjw.com/

Headquartered in Compton, California, Death Row Records Inc. --
http://www.deathrowrecords.net/-- is an independent record  
producer.  The company and its owner, Marion Knight, Jr., filed
for chapter 11 protection on April 4, 2006 (Bankr. C.D. Calif.
Case No. 06-11205 and 06-11187).  Daniel J. McCarthy, Esq., at
Hill, Farrer & Burrill, LLP, and Robert S. Altagen, Esq.,
represent the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
total assets of $1,500,000 and total debts of $119,794,000.


DELPHI CORP: Panel Wants to Ensure Seat in Delphi-GM Negotiations
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors of Delphi
Corporation and its debtor-affiliates intends to seek authority
from the U.S. Bankruptcy Court for the Southern District of New
York to file, serve and prosecute on behalf of the Debtors'
estates:

    -- claims against General Motors Corporation and former
       officers of the Debtors;

    -- defenses that the estates may have to claims asserted by GM
       and the former officers; and

    -- all other rights and remedies of the estates related to the
       Claims and Defenses.

However, the Committee does not intend to file the Complaint at
this time.  The Committee clarifies that the purpose of the
requested authority is to ensure that it has a seat at the table
in the negotiations currently taking place between the Debtors
and GM with respect to GM's contributions to, and claims in
respect of, the Debtors' "transformation."

Mark A. Broude, Esq., at Latham & Watkins, LLP, in New York,
points out that having a seat is essential to accomplish what the
Committee and GM have stated to be their preferred outcome of
those negotiations -- a global settlement among GM, the Debtors
and the Committee.  This goal is apparently not shared by the
Debtors, who have been excluding the Committee from all
negotiations with GM, Mr. Broude argues.

Mr. Broude points out that the current path down which the
Debtors are taking the negotiations with GM will almost certainly
lead to a protracted and potentially damaging litigation with the
Committee.  If the Committee is given a seat at the table,
negotiations will be accelerated with a substantially greater
opportunity for a mutually acceptable result, Mr. Broude says.

The Committee will attach two documents to the request as
exhibits:

    (a) a letter the Committee sent to the Debtors on May 11,
        2006, describing and formally requesting that the Debtors
        pursue certain affirmative Claims and Defenses against GM
        or consent to the Committee's pursuit of them on their
        behalf; and

    (b) a draft complaint setting forth the affirmative Claims and
        Defenses against GM described in the Demand Letter, as
        well as additional affirmative Claims and Defenses against
        certain of the Debtors' former officers.

In preparing the Complaint, the Committee used information from
the Debtors relating to ongoing investigations, including
investigations by the Securities and Exchange Commission.  That
information is confidential and was provided to the Committee
pursuant to the terms of a Joint Interest Agreement between the
Debtors and the Committee.

The Demand Letter and the Complaint reflect the results of
research conducted by the Committee's professionals.  This
research is both based on the Debtors' Confidential Information
as well as reflective of the Committee's own confidential
investigations and analyses.  Mr. Broude points out that if the
Confidential Information were made public, it could harm both the
Debtors and the Committee.  Furthermore, making all of the
allegations and claims asserted in the Complaint public could
well have a damaging effect on the negotiations with GM, Mr.
Broude says.

In this regard, the Committee sought and obtained the Court's
authority to file under seal the Demand Letter and the Complaint,
once they are filed.

Based in Troy, Mich., Delphi Corporation -- http://www.delphi.com/
-- is the single largest global supplier of vehicle electronics,
transportation components, integrated systems and modules, and
other electronic technology.  The Company's technology and
products are present in more than 75 million vehicles on the road
worldwide.  The Company filed for chapter 11 protection on Oct. 8,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler
Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell
A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins
LLP, represents the Official Committee of Unsecured Creditors.
As of Aug. 31, 2005, the Debtors' balance sheet showed
$17,098,734,530 in total assets and $22,166,280,476 in total
debts.  (Delphi Bankruptcy News, Issue No. 34; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


DELPHI CORP: Deloitte & Touche Completes 2005 Annual Report Audit
-----------------------------------------------------------------
Delphi Corporation discloses in a regulatory filing with the
Securities and Exchange Commission that Deloitte & Touche LLP has
completed the audit of the Company's annual report for the year
ended Dec. 31, 2005.

Deloitte has advised Delphi that material weaknesses existed in
the Company's internal control over financial reporting.  The
material weaknesses were:

    1.  Delphi did not maintain a control environment that fully
        emphasized the establishment of or adherence to
        appropriate control for certain aspects of the Company's
        operations;

    2.  Delphi did not perform a formalized, company-wide risk
        assessment to evaluate the implications of relevant risks
        on financial reporting;

    3.  Delphi failed to design and implement controls over the
        contract administration process to provide reasonable
        assurance that significant contracts are adequately
        analyzed to determine the accounting implications, or to
        capture, analyze, and record the accounting impact of
        amendments to existing contracts;

    4.  Controls over account reconciliation did not operate
        effectively;

    5.  Controls over journal entries did not operate effectively;

    6.  Controls over inventory accounting did not operate
        effectively;

    7.  Controls over fixed asset accounting did not operate
        effectively;

    8.  Controls over income tax accounting and disclosure did not
        operate effectively; and

    9.  Controls over temporary cash disbursements process
        accounting did not operate effectively

Delphi also reports that Deloitte's engagement as the Company's
independent registered public accounting firm for the year ended
December 31, 2005, has concluded.

Ernst & Young LLP has replaced Deloitte as Delphi's accountant,
effective as of January 1, 2006, for the fiscal year ended
December 31, 2006.

The Audit Committee of the Board of Directors of Delphi selected
Ernst & Young on December 7, 2005, after reviewing proposals from
four accounting firms.  The Court approved Delphi's employment of
Ernst & Young on April 5, 2006.

John D. Sheehan, Delphi vice president, chief restructuring
officer, and chief accounting officer, clarifies that the change
was not the result of any disagreement between Delphi and
Deloitte.  Rather, Mr. Sheehan relates, the Audit Committee's
selection of Ernst & Young resulted in "the dismissal of Deloitte
& Touche upon Deloitte & Touche's completion of its audit
engagement for the year ended December 31, 2005."

On July 12, 2006, Delphi received a letter from Deloitte
confirming that their engagement its client-auditor relationship
with Delphi had ceased.

A full-text copy of the Form 8-K/A Delphi filed with the SEC is
available at no charge at http://ResearchArchives.com/t/s?e99

A full-text copy of Deloitte's letter, dated July 12, 2006, to
Delphi is available at no charge at:

               http://ResearchArchives.com/t/s?e9a

Based in Troy, Mich., Delphi Corporation -- http://www.delphi.com/
-- is the single largest global supplier of vehicle electronics,
transportation components, integrated systems and modules, and
other electronic technology.  The Company's technology and
products are present in more than 75 million vehicles on the road
worldwide.  The Company filed for chapter 11 protection on Oct. 8,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481).  John Wm. Butler
Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts.  Robert J. Rosenberg, Esq., Mitchell
A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins
LLP, represents the Official Committee of Unsecured Creditors.
As of Aug. 31, 2005, the Debtors' balance sheet showed
$17,098,734,530 in total assets and $22,166,280,476 in total
debts.  (Delphi Bankruptcy News, Issue No. 34; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


DURA AUTOMOTIVE: Poor Performance Prompts S&P to Junk Rating
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Dura Automotive Systems Inc. to 'CCC' from 'B-'.

"This stems from the company's very weak earnings and negative
cash flow during the second quarter of 2006, and poor prospects
for meaningful improvements for the remainder of the year given
tough industry conditions," said Standard & Poor's credit analyst
Martin King.

Rochester Hills, Michigan-based Dura, a manufacturer of automotive
and recreational vehicle components, has total debt of about
$1.2 billion.  The rating outlook is negative.

Dura reported EBITDA substantially below prior-year levels during
the second quarter, typically the company's strongest quarter of
the year.  EBITDA was down $29 million (60%) from last year, and
the company's free cash flow was negative $50 million.

Although automotive industry conditions were difficult during the
second quarter, Dura's performance was much worse than expected.
The company attributed its weak results to these:

   -- Unfavorable product mix, as sales of some of Dura's most
      profitable products fell because of the market share losses
      of key customers, reduced production of high-margin light
      trucks and SUVs, and sparse new business contracts that were
      insufficient to replace lost programs;

   -- Higher raw material costs, especially for aluminum, which
      was up 50% year-over-year, and steel, which did not decrease
      by as much as expected.  The expiration of raw material cost
      recovery contracts and the lag in passing on cost increases
      to customers forced Dura to absorb the bulk of the material
      cost increases during the second quarter;

   --Decreased pricing, as the company agreed to immediately
     reduce prices to gain acceptance on a key customer's raw
     material resale program; and

   -- A bloated overhead cost structure, as Dura has failed to
      reduce indirect labor costs in line with the decline in
      revenue experienced during the past two years.


DURA OPERATING: Operation Shortfall Cues Moody's to Junk Ratings
----------------------------------------------------------------
Moody's Investors Service lowered the ratings of Dura Operating
Corp., and its direct parent, Dura Automotive Systems, Inc.  Dura
Automotive's Corporate Family Rating has been lowered to Caa1 from
B3.  Dura Operating Corp.'s senior secured second lien ratings
were lowered to Caa1 from B3, the senior unsecured notes were
lowered to Caa3 from Caa2; and the senior subordinated notes were
lowered to Ca from Caa3.

Dura Automotive Systems Capital Trust's preferred securities
were affirmed at Ca. The lowered ratings reflect the company's
significant performance shortfall while it executes a major
restructuring plan to move production to low cost countries.  
The company's results have been impacted by market share losses of
its Big 3 OEM customers, slower growth in Europe, higher raw
material pricing, and the loss of its GMT 800 seat adjuster
business and other business mix issues.

The speculative grade liquidity rating was lowered to SGL-4,
representing the potential need for additional financing over the
next twelve months driven by the company's recent quarterly
performance, continuing industry pressures, and the company's cash
restructuring needs. The outlook is negative.

The negative outlook reflects Moody's expectation that these
industry pressures will continue to negatively impact Dura
Automotive's performance given expected lower production levels
from the Big 3 OEMs in the second half of 2006 and continued raw
material pricing pressures.  Additionally, the company announced
its expectation of taking a goodwill impairment charge, reflecting
the lower expected profitability of its businesses. While the
company noted expected cost benefits from further headcount
reductions, this will unlikely be sufficient to reverse the impact
of the industry pressures noted above.

For the LTM period ending July 2, 2006, Dura Automotive's debt
has risen to well over 8x and EBIT has deteriorated to
approximately 0.7x.  These results have been dramatically impacted
by the deterioration in the company's most recent quarter during
which it reported break even EBIT.  These metrics along with the
prospects for further operating weakness are heavily weighted
within Moody's Automotive Supplier methodology and position the
company's Corporate Family Rating at the Caa1 level.

Ratings lowered:

Dura Operating Corp.:

   * $150 million guaranteed senior secured second-lien term loan
     due May 2011, to Caa1 from B3;

   * $75 million guaranteed senior secured second-lien add-on
     term loan due May 2011, to Caa1 from B3

Dura Automotive Systems, Inc.:

   * Corporate Family Rating to Caa1 from B3;

   * $400 million of 8.625% guaranteed senior unsecured notes due
     April 2012, to Caa3 from Caa2;

   * $456 million of 9% guaranteed senior subordinated notes due
     May 2009 to Ca from Caa3;

   * ?100 million of 9% guaranteed senior subordinated notes due
     May 2009, to Ca from Caa3;

Dura Automotive's Speculative Grade Liquidity Rating to SGL-4 from
SGL-3

Ratings affirmed:

Dura Automotive Systems Capital Trust's


   * Ca rating for the $55.25 million of 7.5% convertible trust
     preferred securities due 2028

Dura Automotive's $175 million guaranteed senior secured first-
lien asset-based revolving credit is not rated by Moody's.

The last rating action was March 14, 2006 when the ratings were
assigned to the senior secured second-lien add-on term loan.

Dura Automotive, headquartered in Rochester Hills, Michigan,
designs and manufactures components and systems primarily for
the global automotive industry including driver control systems,
structural door modules, glass systems, seating control systems,
exterior trim systems, and mobile products. Annual revenues
approximate $2.3 billion.


EAGLEPICHER INC: Completes Chapter 11 Restructuring Process
-----------------------------------------------------------
EaglePicher Incorporated and its U.S. subsidiaries have completed
their Chapter 11 restructuring process.  On Aug. 1, 2006, pursuant
to their confirmed plan of reorganization, substantially all the
assets of EPI and its U.S. subsidiaries will be transferred to the
newly formed EaglePicher Corporation and its subsidiaries.

EPI and its U.S. subsidiaries filed Chapter 11 petitions in the
U.S. Bankruptcy Court for the Southern District of Ohio in
Cincinnati on April 11, 2005.

As reported in the Troubled Company Reporter on Jan. 4, 2006, EPI
obtained new debtor-in-possession credit facilities consisting of
a $230 million first lien facility, which includes a $70 million
revolving credit facility and a $160 million term loan; a $65
million second lien term loan and a $50 million third lien term
loan.  These credit facilities converted into financing for EPC
and provided sufficient funding to complete the reorganization and
operate the company into the future.

EaglePicher Corp. has entirely new ownership.  While EaglePicher
Inc. was owned by Netherlands-based equity funds, EPC has U.S.
ownership, principally affiliates of Angelo, Gordon & Company and
Tennenbaum Capital Partners.  This is important to the company due
to its extensive U.S. government/defense business.

"We appreciate the support of our employees, customers and
suppliers during this process and are ready to move forward as a
stronger, leaner, and operationally focused company," said David
Treadwell, who was named president and CEO of EPC.  Stuart
Gleichenhaus had served as interim chairman and CEO of EPI.

                        EPI Restructures

The principal issues sited for driving EPI into bankruptcy were
significant drop off in operations performance in several
divisions (notably Hillsdale Automotive), failed investment in
joint ventures compounded by a high level of debt (over $500
million).

Through its restructuring, EPI tackled these issues resulting in
reduced debt requiring cash interest from over $500 million to
$230 million, reduced corporate overhead costs by over $5 million
annually, will have invested through 2006 $30 million in
operational improvements and business growth, and implemented
operational improvements including substantial quality
enhancements, increased customer satisfaction metrics, increased
productivity measurements and significantly reduced employee
turnover.  As a result of these efforts, business has increased in
most of its divisions.

"This has been a totally focused approach which we will continue
to follow," said Mr. Treadwell. "It is based on operational
excellence, responsible investments and manageable debt."

EPC operations emphasize lean manufacturing, best-in-class quality
and most competitive cost.  This is balanced with investments in
the core business units.  "To grow in value for our entire
constituency, we need to invest, but it must be in specific areas
where we can leverage our operational expertise," Mr. Treadwell
added.  "Additionally, we will keep our debt requiring cash
interest payments to a responsible, manageable level.

"This could not have been accomplished in such a short period of
time without a dynamic team committed to making the necessary
changes," he added.  "Our plans are to be a better supplier,
customer, and employer."

Stephen D. Lerner of Squire, Sanders & Dempsey L.L.P, represented
EPI during the restructuring process.  Houlihan Lokey Howard &
Zukin served as EPI's financial advisor in its restructuring.

                EaglePicher Corporation Companies

EPC's operating companies are: Hillsdale Automotive, Wolverine
Advanced Materials, EP Boron, EaglePicher Technologies, EP Medical
Batteries, EP Pharmaceutical Services, and EP Minerals.

               Southeastern Michigan Headquarters

EPC also relocated its headquarters to Southeastern Michigan from
Phoenix, Arizona.  The corporate staff is currently co-located in
Inkster, Michigan, with the headquarters for EPC companies
Hillsdale Automotive and Wolverine Advanced Materials.

                   President and CEO Appointed

Mr. Treadwell has been named president and CEO of EPC.  He joined
EPI in July 2005 as president of EaglePicher Hillsdale Division.  
In November 2005 he also assumed the position of COO of EPI.

Mr. Treadwell has earned a solid reputation for working companies
through transitions.  Most recently, he served as CEO of Oxford
Automotive, where he led the $1 billion Tier 1 automotive supplier
through a successful restructuring process.

His experience spans more than 20 years.  He began his career with
the late Heinz Prechter in his automotive, publishing and real
estate groups.  As CEO of Prechter Holdings, Mr. Treadwell was
responsible for overall operations, acquisitions and divestitures.  
Mr. Treadwell led the successful divestiture and wrap up of
Prechter Holdings after the death of Heinz Prechter.

                 Chairman of the EPC Board Named

Donald Runkle, former vice chairman and CTO of Delphi Corporation,
has been named non-executive chairman of EPC.  Mr. Runkle
currently consults for private equity firms, Solectron, and high-
tech corporations, and serves as a director of Automotive
Acquisition Corp., a private placement firm.

As Delphi vice chairman, Mr. Runkle was the senior executive for
deploying lean principles, streamlining and integrating
engineering, manufacturing, and purchasing.  He served on the
Board of Directors and Strategy Board.  As CTO, Mr. Runkle was
responsible for research and development and global supply
management.

Mr. Runkle began his career as a co-op student at Eastman Kodak
and Ford Motor Company.  Following graduation, he joined General
Motors, where he held a variety of positions, including vice
president and general manager, Energy and Engine Management
Division.  Under his leadership, countless product innovations
were introduced, and many national racing championships were won
including Car of the Year and Top Ten Engines.  In 1998/99, Runkle
co-led the IPO and spin-off of Delphi from General Motors.

Also serving on the EPC board of directors are:

   -- David Treadwell, president and CEO of EPC;
   -- James Gaffney, former CEO of General Aquatics/KDI
      Corporation;
   -- Edward D. Horowitz, president and CEO of SES-Americon;

   -- General Ron Yates (Ret.), former commander of both Air Force
      Systems Command and Air Force Material Command;

   -- Richard P. Bermingham, residential real estate developer and
      private investor;

   -- Todd Arden, partner, Angelo, Gordon & Company; and

   -- Mark Holdsworth, managing partner, Tennenbaum Capital
      Partners.

                         About EaglePicher

Headquartered in Phoenix, Arizona, EaglePicher Incorporated
-- http://www.eaglepicher.com/-- is a diversified manufacturer   
and marketer of innovative advanced technology and industrial
products for space, defense, automotive, filtration,
pharmaceutical, environmental and commercial applications
worldwide.  The company along with its affiliates and parent
company, EaglePicher Holdings, Inc., filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Ohio Case No. 05-12601).
Stephen D. Lerner, Esq., at Squire, Sanders & Dempsey L.L.P,
represents the Debtors in their restructuring efforts.  Houlihan
Lokey Howard & Zukin is the Debtors financial advisor.  When the
Debtors filed for protection from their creditors, they listed
$535 million in consolidated assets and $730 in consolidated
debts.


ECHOSTAR COMMS: DBRS Holds BB Senior Unsecured Notes Rating
-----------------------------------------------------------
Dominion Bond Rating Service confirmed the ratings of EchoStar
Communications Corporation and EchoStar DBS Corporation at BB
(low) and BB.  The trend is Stable.  EchoStar's ratings reflect
ongoing subscriber growth and scale benefits despite operating in
an increasingly competitive market; and higher debt levels and the
expectation that free cash flow should improve and be roughly
breakeven in 2006.

   * Senior Unsecured Notes  Confirmed BB Stb
   * Convertible Debt  Confirmed BB (low) Stb

Despite subscriber growth expected to continue over the
next 18 months driven by EchoStar's value proposition; competitive
advantages such as its high-definition channel line-up and ethnic
programming; and a renewed distribution agreement with AT&T Inc.,
the Company continues to subsidize this growth through higher
subscriber acquisition costs.  Acquisition costs are increasing -
currently over $650 per subscriber - as higher-value set-top boxes
and more multiple-room boxes are deployed.  However, DBRS believes
that with churn levels remaining reasonable at slightly above 1.5%
per month, this investment in subscriber growth continues to be
practical for EchoStar for the time being despite ARPU growth not
keeping pace.   This strategy could be a concern and become
uneconomic for the Company should churn levels increase above the
2% level.

While cash flow from operations continues to improve as a result
of this growth, subscribers are increasingly leasing equipment,
which is driving capex levels higher.  With capital intensity
increasing, DBRS believes this somewhat reduces EchoStar's
competitive advantage as it places it more on-par with its
terrestrial cable and telco competitors.  DBRS expects the
competitive intensity to increase for EchoStar and its stand-alone
video service as cable operators are having success in bundling
their services, which has, after many years of modest erosion, led
to growth in video subscribers; and the telcos are beginning to
deploy a terrestrial video service as a new product.

While DBRS notes that gross debt levels have increased by
$1 billion in Q1 2006, DBRS believes that this remains consistent
with its current ratings as cash flow from operations continues to
improve.  However, DBRS does note that EchoStar continues to
operate with greater leverage than its DTH peers.  As free cash
flow is expected to be roughly breakeven in 2006 as the Company
continues to increase its leased equipment strategy and sizably
invests in its satellite fleet, DBRS expects gross debt levels to
remain stable for the next 18 months.  Additionally, DBRS expects
the Company to direct some of its $2.6 billion in cash for
potential acquisitions, additional investments in new technologies
and, should these not materialize, further
returns to shareholders.

While DBRS expects that EchoStar can maintain its current ratings
in an increasingly competitive environment, it will need to
generate meaningful levels of recurring free cash flow before any
rating improvement would be considered.


ENRE LP: Creditors Won't Receive Legal Fees Under Old Sec. 506(b)
-----------------------------------------------------------------
The United States Court of Appeals for the Fifth Circuit told
Bridgeport Tank Trucks; West Fork Tank Trucks Inc.; Baker Hughes
Oilfield Operations Inc.; and Wilson Supply (a division of Smith
International, Inc.) that even though they are oversecured they
can't recover their legal fees in EnRe LP's chapter 11 case on
account of their claims secured by non-consensual statutory
materialmen's liens.

EnRe LP filed for chapter 11 protection in the U.S. Bankruptcy
Court for the Southern District of Texas prior to the Oct. 17,
2005, amendments to 11 U.S.C. Sec. 506(b) that would permit
recovery of the four secured creditors' legal fees in a chapter 11
case filed today.  In a decision published at 2006 WL 2054050, a
three-judge panel says, in short, the statute the four creditors
want wasn't valid law when EnRe sought chapter 11 protection.

The four secured creditors performed work on oil and gas wells in
Texas and Wyoming.  The creditors' contracts provided that EnRe
would pay costs and attorney fees in the event of litigation to
collect what EnRe owed.  None had an express security agreement.  
Instead, following industry practice in the oil patch, the four
creditors timely filed for and obtained statutory materialmen's
mineral liens (M&M liens) on EnRe's property pursuant to Texas or
Wyoming law.  After EnRe filed for bankruptcy, the four creditors
duly filed proofs of claim.  The four creditors' claims were
allowed and included them in Class 8 of EnRe's reorganization
plan.  The bankruptcy court held, and the district court affirmed,
that the oversecured creditors were entitled to receive principal
and interest, which EnRe paid, but they were not entitled to
receive attorney fees and costs under 11 U.S.C. Sec. 506(b) as
codified prior to Oct. 17, 2005.

Timothy Paul Dowling, Esq., at Gary, Thomasson, Hall & Marks, in
Corpus Christi, Tex., represented Bridgeport Tank Trucks and West
Fork Tank Trucks Inc., and Stewart F. Peck, Esq., at Lugenbuhl,
Wheaton, Peck, Rankin & Hubbard, in New Orleans, and William Ross
Spence, Esq., at Snow Fogel Spence, in Houston, Tex., represented
Baker Hughes Oilfield Operations Inc. and Wilson Supply in this
litigation.  Robert Carroll Pate, Esq., at the Law Office of
Robert C. Pate, in Corpus Christi represented the Lien Agent and
Appellee in this matter.


ENTERGY NEW ORLEANS: Hires Claro Group as Insurance Consultant
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Louisiana
allowed Entergy New Orleans, Inc., to employ The Claro Group LLC
as its insurance consulting services provider.

As reported in the Troubled Company Reporter on Jun 20, 2006,
pursuant to a retention agreement, Claro will:

   (1) participate in settlement negotiations and communications
       with American Motorists Insurance Company and in
       discussions with the Illinois Insurance Division to achieve
       final settlement with AMICO;

   (2) participate in detailed settlement negotiations with AMICO
       regarding proposed settlement terms and provide basis for
       allocating any negotiated settlement with AMICO among ENOI
       and its affiliates with rights to the AMICO Policy;

   (3) continue to assist in discussing settlement negotiations
       with ENOI and connection with its bankruptcy case until
       execution of settlement documents;

   (4) meet with creditors on an as needed basis to review
       information regarding any proposed settlement with AMICO;
       and

   (5) assist ENOI in obtaining Court approval of any proposed
       settlement.

Claro will be paid a contingent fee equal to 17% of all monies
that ENOI receives in settlement from AMICO after obtaining Court
approval of any settlement.

George G. Hansen and John R. Cadarette, Jr., shareholders and
managing directors of Claro, will be primarily responsible for
handling the firm's retention by the Debtor.

Mr. Hansen assured the Court that the Claro does not represent any
interest adverse to the Debtor and its estate.  Claro is a
disinterested person as that term is defined in Section 101(14) of
the Bankruptcy Code, and as modified by Section 1107(b).

                     About Entergy New Orleans

Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc.
-- http://www.entergy-neworleans.com/-- is a wholly owned  
subsidiary of Entergy Corporation.  Entergy New Orleans provides
electric and natural gas service to approximately 190,000 electric
and 147,000 gas customers within the city of New Orleans.  Entergy
New Orleans is the smallest of Entergy Corporation's five utility
companies and represents about 7% of the consolidated revenues and
3% of its consolidated earnings in 2004.  Neither Entergy
Corporation nor any of Entergy's other utility and non-utility
subsidiaries were included in Entergy New Orleans' bankruptcy
filing.  Entergy New Orleans filed for chapter 11 protection on
Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697).  Elizabeth J.
Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the
Debtor in its restructuring efforts.  Carey L. Menasco, Esq.,
Philip Kirkpatrick Jones, Jr., Esq., and Joseph P. Hebert, Esq.,
at Liskow & Lewis, APLC, represent the Official Committee of
Unsecured Creditors.  When the Debtor filed for protection from
its creditors, it listed total assets of $703,197,000 and total
debts of $610,421,000.  (Entergy New Orleans Bankruptcy News,
Issue No. 20; Bankruptcy Creditors' Service, Inc., 215/945-7000)


FAIRFAX FINANCIAL: S&P Puts BB Counterparty Credit Rating on Watch
------------------------------------------------------------------
Standard & Poor's Ratings Services placed a number of its ratings
on CreditWatch with negative implications, including its:

   -- 'BB' counterparty credit ratings on Fairfax Financial
      Holdings Ltd. (NYSE:FFH) and Crum & Forster Holdings Corp.;

   -- 'BB-' counterparty credit rating on TIG Holdings Inc.;

   -- various counterparty credit and financial strength ratings
      on Fairfax's operating insurance company subsidiaries;

   -- 'BBB-' counterparty credit rating on Odyssey Re Holdings
      Corp. (NYSE:ORH); and

   -- 'A-' counterparty credit and financial strength ratings on
      Odyssey America Reinsurance Corp., Clearwater Insurance Co.,
      and Hudson Specialty Insurance Co. and 'A-' financial
      strength rating on Falcon Insurance Co. (Hong Kong) Ltd.

"These ratings were placed on CreditWatch negative in response to
the announcement by FFH that it will delay filing its second-
quarter financial statements," explained Standard & Poor's credit
analyst Damien Magarelli.

The delay is being caused by the company's disclosure that it had
discovered accounting errors dating back several years that could
result in a drop in retained earnings and the refiling of prior
financial statements.

The company's current best estimate is that these adjustments will
reduce shareholders' equity by about $225 million-$240 million.
The company and its auditors have not yet completed their work, so
the final adjustment could be different.

If the ultimate adjustment is close to the current estimate,
Standard & Poor's expects to affirm the ratings.  However, if the
ultimate charge is significantly larger or if other issues are
raised in the course of the audit review, the ratings could be
lowered.

Fairfax also announced that it would commute a $1 billion
reinsurance contract in the third quarter, resulting in a loss of
$415 million.  The commutation will eliminate the contractual
interest expense associated with the funds held under this treaty,
boosting investment income prospectively.  Standard & Poor's had
already factored the balance-sheet impact of this treaty into the
ratings.

Standard & Poor's expects to resolve the CreditWatch status of the
ratings following the regulatory filing of FFH's second-quarter
2006 financial statements.  As the auditors complete their work on
the various entities, it is possible that the ratings on some
entities will be removed from CreditWatch prior to the ratings on
FFH itself.


FISHER SCIENTIFIC: Reports Second Quarter Income of $121.4 Million
------------------------------------------------------------------
Fisher Scientific International Inc.'s income from continuing
operations for the second quarter increased to $121.4 million from
$85.6 million in the same period of 2005.

The Company also reported sales for the second quarter increased
9.1% to $1,465.8 million compared with $1,343.1 million in the
corresponding period of 2005.

Excluding the effect of foreign exchange, sales totaled
$1.462 billion in the second quarter, an 8.9% percent increase
over the same quarter in 2005.

For the six months ended June 30, 2006, the Company' sales totaled
$2,878.2 million, an 8.6% increase over sales of $2.649 billion in
the corresponding period last year.  Excluding the effect of
foreign exchange, its sales totaled $2.895 billion, a 9.3%
increase compared with the first six months of 2005.  Income from
continuing operations for the first six months was $227.6 million,
compared with $161.6 million in the prior-year period.

During the first six months of 2006, the Company generated
$247.4 million in cash from operations, reflecting growth in
operating earnings and ongoing improvements in working capital
management. Capital expenditures during the same period were
$79.5 million, representing maintenance capital expenditures,
investments in growth initiatives in the company's life-science
and managed-services businesses, as well as spending associated
with Apogent integration projects.

"We delivered strong results in the second quarter - setting new
records for both sales and earnings," said Paul M. Montrone,
chairman and chief executive officer.  "Customer demand for our
products and services drove top-line growth, while contributions
from recent acquisitions as well as synergies from our merger with
Apogent resulted in record operating income."

Fisher Scientific International Inc. (NYSE: FSH) --
http://www.fisherscientific.com/-- is a FORTUNE 500 company and  
is a component of the S&P 500 Index.  Fisher provides products and
services to the scientific community and facilitates discovery by
supplying researchers and clinicians in labs around the world with
the tools they need.  With approximately 19,500 employees
worldwide, the company had revenues of $5.6 billion in 2005.

                         *     *     *

As reported in the Troubled Company Reporter on Dec. 12, 2005,
Fitch Ratings assigned a 'BBB-' issuer default rating to Fisher
Scientific International Inc.  Fitch has also assigned a 'BBB'
rating to FSH's secured credit facility, a 'BBB-' rating to FSH's
senior unsecured debt, and a 'BB+' to FSH's subordinated debt.  
The ratings apply to approximately $2.2 billion of debt.  The
Rating Outlook is Stable.


FOAMEX INTERNATIONAL: Amend Rights Agreement With Mellon Investor
-----------------------------------------------------------------
Foamex International Inc. and Mellon Investor Services LLC amended
their August 5, 2004, Rights Agreement, on July 19, 2006.

According to Gregory J. Christian, Foamex's executive vice
president and general counsel, the Rights Agreement is amended to
provide that the current members of an ad hoc committee of the
Debtors' stockholders will not be deemed "Acquiring Persons" under
the Agreement.  The Amendment will permit the Ad Hoc Committee to
conduct its operations and to allow the company's stockholders to
communicate freely without incurring adverse consequences under
the Rights Agreement.

"Acquiring Person" is revised to mean any person who becomes the
beneficial owner of 20% or more of the company's common shares
outstanding, excluding:

   (a) Foamex International Inc.,

   (b) any of the company's subsidiaries,

   (c) any employee benefit plan of the company or of its
       subsidiary, or any entity holding common shares for
       purposes of funding the plan;

   (d) any Scotia Stockholder so long as he is not the beneficial
       owner of 25% or more of Foamex's outstanding common
       shares; or

   (e) D.E. Shaw Laminar Portfolios LLC, Par IV Capital
       Management LLC, Paloma International L.P., and Sigma
       Capital Management LLC, which comprise the Ad Hoc
       Committee, as well as Goldman, Sachs & Co., which acts as
       observer of the Committee.

The Amendment also provides that no Foamex stockholder will be
deemed to have beneficial ownership of Foamex common stock solely
as a result of an agreement, arrangement or understanding entered
during, or in connection with, the Debtors' Chapter 11 cases.

                    About Foamex International

Headquartered in Linwood, Pa., Foamex International Inc. --
http://www.foamex.com/-- is the world's leading producer of       
comfort cushioning for bedding, furniture, carpet cushion and
automotive markets.  The Company also manufactures high-
performance polymers for diverse applications in the industrial,
aerospace, defense, electronics and computer industries.  The
Company and eight affiliates filed for chapter 11 protection on
Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).  
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,
represent the Debtors in their restructuring efforts.  Houlihan,
Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the
ad hoc committee of Senior Secured Noteholders.  Kenneth A. Rosen,
Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and
Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the
Official Committee of Unsecured Creditors.  As of July 3,
2005, the Debtors reported $620,826,000 in total assets and
$744,757,000 in total debts.  (Foamex International Bankruptcy
News, Issue No. 23; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


FOAMEX INT'L: Wants to Assume ACE American Insurance Policies
-------------------------------------------------------------
Foamex International Inc. and its debtor-affiliates seek the
U.S. Bankruptcy Court for the District of Delaware's consent to
assume their insurance agreements with ACE American Insurance
Company.

ACE American has provided the Debtor with workers' compensation,
automobile, employer and general liability insurance coverage for
many years, Joseph M. Barry, Esq., at Young Conaway Stargatt &
Taylor LLP, in Wilmington, Delaware, relates.

Pursuant to prepetition insurance policies and related agreements,
the Debtors agreed to make certain payments and reimbursements to
ACE American on account of insurance premiums, premium taxes,
surcharges and assessments, and funding of paid losses deposit
funds, among others.

As security for payment and performance of their obligations, the
Debtors have provided ACE American with:

   (1) duly perfected, valid security interests in and liens on
       all collateral and security, including paid loss deposit
       funds, cash and pledged collateral accounts; and

   (2) clean, irrevocable, evergreen letters of credit issued by
       a bank or other financial institution.

Subject to the Debtors' assumption of the Insurance Agreements,
ACE American has agreed to:

   -- refund the Debtors $1,323,069, representing adjustments
      to the pledged cash collateral, reimbursements and
      premiums they previously paid; and

   -- authorize the reduction of the Letters of Credit by
      $1,016,993.

The Debtors also ask the Court to grant them authority to provide
collateral and security to the Insurance Agreements, and allow
ACE American to draw against the collateral, without further
Court order.

                    About Foamex International

Headquartered in Linwood, Pa., Foamex International Inc. --
http://www.foamex.com/-- is the world's leading producer of       
comfort cushioning for bedding, furniture, carpet cushion and
automotive markets.  The Company also manufactures high-
performance polymers for diverse applications in the industrial,
aerospace, defense, electronics and computer industries.  The
Company and eight affiliates filed for chapter 11 protection on
Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).  
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,
represent the Debtors in their restructuring efforts.  Houlihan,
Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the
ad hoc committee of Senior Secured Noteholders.  Kenneth A. Rosen,
Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and
Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the
Official Committee of Unsecured Creditors.  As of July 3,
2005, the Debtors reported $620,826,000 in total assets and
$744,757,000 in total debts.  (Foamex International Bankruptcy
News, Issue No. 23; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


GRUPO IUSACELL: Posts MXN867 Million Net Loss in Second Quarter
---------------------------------------------------------------
Grupo Iusacell, S.A. de C.V., reported its financial results
corresponding to the second quarter of 2006.

Net revenues in the second quarter of 2006 increased by 27% to
MXN 1,852 million, as compared to MXN1,460 million during the same
period 2005.  The increase is primarily a result of growth in
postpaid revenues as well as higher revenues from value added
services mainly attributable to an increase in the subscriber
base.  Grupo Iusacell ended the second quarter of 2006 with
2.0 million subscribers.

During the second quarter of 2006, total cost, increased by 46% to
MXN1,115 million as compared to MXN763 million in the second
quarter 2005.  Operating expenses increased by 12% to Ps $437
million, as compared to MXN389 million in the same period 2005.

The increase in the total cost during the second quarter 2006
mainly reflects the increase in:

    (i) handset subsidy,

   (ii) the costs related to value added services and
        interconnection costs as a result of the increase in air
        time traffic and subscribers,

  (iii) technical expenses, and

   (iv) concessions rights.

The increase in operating expenses during the second quarter 2006
mainly reflects an increase in administrative expenses owing to
the creation of regional sales and customer care structures,
offset by the reduction in advertising expenses.

Iusacell's operating income before depreciation and amortization
for the second quarter of 2006 was MXN300 million, a decrease of
3% as compared to MXN308 million during the same period the year
before.

Iusacell registered a net loss of MXN867 million for the second
quarter of 2006, compared to a net loss of MXN$34 million during
the same period in 2005.  This loss is mainly a result of an
increase in integral financing costs affected mainly by the
exchange loss derived from the increase in exchange rates of the
peso against the dollar.

During the second quarter of 2006, the Company made investments of
approximately $17 million, mainly for the acquisition of cellular
equipment related to the expansion of coverage and capacity of
Iusacell's 3-G network and EV-DO services.

                       Debt Restructuring

Grupo Iusacell continues with its debt restructuring process.  In
this regard, the Company has commenced various proceedings for the
legal implementation of the agreements reached with majority of
its creditors.  The company expects to conclude the restructuring
within the next few months.

As reported in the Troubled Company Reporter-Latin America, Grupo
Iusacell said that it will continue to implement the legal steps
to implement the restructuring of the debt of its operating
subsidiary, Grupo Iusacell Celular, in accordance with the
agreements previously reached with the majority of its creditors,
and supported by further creditors through their participation to
date in the exchange offer and consent solicitation of Iusacell
Celular launched on May 25, 2006.  Iusacell Celular reached an
agreement in principle with a majority of its secured creditors,
and has continued to received the support of additional creditors
by means of their participation in the Exchange Offer which
expired on July 26, 2006, 5:00 p.m. New York City Time.

                       About Grupo Iusacell

Headquartered in Mexico City, Mexico, Grupo Iusacell, S.A. de
C.V. (BMV: CEL) -- http://www.iusacell.com-- is a wireless  
cellular and PCS service provider in Mexico with a national
footprint.  Independent of the negotiations towards the
restructuring of its debt, Grupo Iusacell reinforces its
commitment with customers, employees and suppliers and guarantees
the highest quality standards in its daily operations offering
more and better voice communication and data services through
state-of-the-art technology, including its new 3G network,
throughout all of the regions in which it operate.

As of Dec. 31, 2005, Grupo Iusacell's stockholders' deficit
widened to MXN2,076,000,000 from a deficit of MXN1,187,000,000
at Dec. 31, 2004.

Grupo Iusacell filed for bankruptcy protection on June 18 under
Mexican Law to prevent creditors from disrupting its debt
restructuring talks.  On July 14, 2006, Gramercy Emerging Markets
Fund, Pallmall LLC and Kapali LLC, owed an aggregate amount of
$55,878,000 filed an Involuntary Chapter 11 Case against Grupo
Iusacell's operating subsidiary, Grupo Iusacell Celular, S.A. de
C.V. (Bankr. S.D.N.Y. Case No. 06-11599).  Alan M. Field, Esq., at
Manatt, Phelps & Phillips, LLP, represents the petitioners.

Iusacell Celular then filed for bankruptcy protection under
Mexican Law on July 18.


GULF COAST: Rejecting 163 Lease Pacts to Facilitate Asset Sale
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
authorized Gulf Coast Holdings Inc., dba Unidynamics Inc., to
reject more than 100 lease agreements.

The Court emphasized that the order does not affect the rights of
Northrop Grumman Corporation, Northrop Grumman Ship Systems, Inc.,
and Bath Iron Works Corporation, if any, under Section 365(n) of
the Bankruptcy Code.

A full-text copy listing the 163 rejected Lease Agreements is
available for a fee at:

  http://www.ResearchArchives.com/bin/download?id=060726213219  

The Debtor sought rejection of the Lease Agreements to facilitate
the sale of their assets to Jered LLC.  The Debtor has determined
that the Sale is the best alternative to a chapter 7 liquidation.

Jered, as the winning bidder in the Debtor's June 1 auction,
agreed to pay the Debtor $4.2 million in cash and to pay the cure
amounts for certain contracts to be assumed and assigned.

Headquartered in Conroe, Texas, Gulf Coast Holdings Inc. filed
for bankruptcy protection on April 28, 2006 (Bankr. N.D. Tex. Case
No. 06-31695).  Daniel I. Morenoff, Esq., and Jeffrey R. Fine,
Esq., at Hughes & Luce, LLP, represent the Debtor in its
restructuring efforts.  The Debtor has employed David Hull as its
chief restructuring officer.  J. Frasher Murphy, Esq., and Jaime
Myers, Esq., at Winstead, Sechrest & Minick represent the Official
Committee of Unsecured Creditors.  In its schedules filed with the
Court, the Debtor reported assets amounting to $18,258,575 and
debts totaling $19,553,664.


HALL-GRAPEVINE: Case Summary & Eight Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Hall-Grapevine Corporation
        dba Hall-Johnson Chevron
        2100 Hall Johnson Road
        Tarrant, TX 76051

Bankruptcy Case No.: 06-42344

Chapter 11 Petition Date: July 31, 2006

Court: Northern District of Texas (Fort Worth)

Judge: Russell F. Nelms

Debtor's Counsel: Eric A. Liepins, Esq.
                  Eric A. Liepins, P.C.
                  12770 Coit Road, Suite 1100
                  Dallas, TX 75251
                  Tel: (972) 991-5591
                  Fax: (972) 991-5788

Total Assets: $1,200,000

Total Debts:  $1,259,400

Debtor's Eight Largest Unsecured Creditors:

      Entity                        Claim Amount
      ------                        ------------
   Comptroller                           $63,000
   117 East 17th Street
   Austin, TX 78701

   North Central                         $18,000
   2445 Santa Ana
   Dallas, TX 75228

   Tara Energy                           $13,000
   5373 West Alabama, Suite 415
   Houston, TX 77056

   Grand Prairie ISD                     $13,000
   2602 South Belt Line Road
   Grand Prairie, TX 75052

   Internal Revenue Service               $6,800
   1100 Commerce
   Mail Code 5027
   Dallas, TX 75242

   IC Commercial                          $5,600

   TCF Express Leasing                   Unknown

   Tetco                                 Unknown


HEADWATERS INC: S&P Affirms BB- Rating on $700 Mil. Debt Facility
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' senior
secured bank loan and '2' recovery ratings on Headwaters Inc.'s
$700 million credit facility and removed them from CreditWatch,
where they were placed with positive implications on June 20,
2006.

At the same time, Standard & Poor's withdrew its 'B' subordinated
debt rating on the company's proposed $150 million subordinated
notes.  The ratings on the bank facility had been placed on
CreditWatch with the expectation that the note proceeds would be
used to reduce the company's term loan.

Headwaters (BB-/Stable/B-2) had about $650 million of lease-
adjusted debt outstanding at June 30, 2006.

"The rating actions follow the company's announcement that it did
not complete the debt offering," said Standard & Poor's credit
analyst Pamela Rice.

The ratings on Headwaters, based in South Jordan, Utah, reflect
meaningful business risks, including:

   * an aggressive acquisition strategy;

   * an alternative energy business whose prospects are uncertain;
     and

   * cyclical demand for its products.

These factors overshadow Headwaters' strengths, including:

   * its favorable position within selected niche businesses;
   * healthy operating margins;
   * moderate capital spending requirements; and
   * demonstrated willingness to issue equity to help fund growth.

Ratings List:

  Headwaters Inc.:

    * Corporate credit rating: BB-/Stable/B-2


Ratings Affirmed, Removed From CreditWatch:

  Headwaters Inc.:

                                  To          From
                                  --          ----
        Senior secured bank loan: BB-    BB-/Watch Pos.
        Recovery rating:          2       2/Watch Pos.

Ratings Withdrawn:

  Headwaters Inc.:

    * $150 mil. senior sub. notes due 2016 to NR from B


HEMOSOL CORP: CCAA Proceedings Stayed Until August 25
-----------------------------------------------------
Hemosol Corp. (TSX: HML) disclosed that the Superior Court of
Justice of Ontario issued an order on July 28 extending the stay
of proceedings against Hemosol Corp. and its affiliates
Hemosol LP in Hemosol's Companies' Creditors Arrangement Act
(Canada) proceedings until August 25, 2006.

PricewaterhouseCoopers Inc., in its capacity as interim receiver
of the assets, property and undertaking of Hemosol, brought a
motion to the Court requesting additional time to allow for the
waiver or satisfaction of the conditions contained in the plan
sponsorship agreement entered into between the Receiver and
2092248 Ontario Inc.

Additional time is also required as a result of the litigation
proceedings in which the Receiver and the Plan Sponsor is engaged
with ProMetic Bioscience Ltd., which are the subject of a sealing
order of the Court.  The proceedings relate to issues involving
the license agreement between Hemosol and ProMetic.  It is
currently anticipated that a trial of the issues in these
proceedings will occur August 15 to 17, 2006.

The Sponsorship Agreement continues to be conditional upon
obtaining the approval of Hemosol's creditors and the Court on a
proposed CCAA plan of compromise, and, unless waived by the Plan
Sponsor, a plan of arrangement under the OBCA, which, if
implemented, will result in a substantial dilution of the equity
of Hemosol held by the shareholders existing at the time of
implementation.

                         About Hemosol

Hemosol Corp. (NASDAQ: HMSLQ, TSX: HML) -- http://www.hemosol.com/
-- is an integrated biopharmaceutical developer and manufacturer
of biologics, particularly blood-related protein based
therapeutics.  Information on Hemosol's restructuring is available
at http://www.pwc.com/ca/eng/about/svcs/brs/hemosol.html

Hemosol Corp and Hemosol LP filed a Notice of Intention to Make
a Proposal Pursuant to section 50.4 (1) of the Bankruptcy and
Insolvency Act on Nov. 24, 2005.  The Company had defaulted in
the payment of interest under its $20 million credit facility.
Hemosol said that it would require additional capital to
continue as a going concern and is in discussions with its
secured creditors with respect to its current financial position.
On Dec. 5, 2005, PricewaterhouseCoopers Inc. was appointed interim
receiver of the Companies.


HILB ROGAL: 2006 Second Quarter Net Income Increases to $20.6 Mil.
------------------------------------------------------------------
Hilb Rogal & Hobbs Company reported financial results for the
second quarter and six months ended June 30, 2006.

For the second quarter, total revenues were $178.4 million,
compared with $162.0 million in the second quarter of 2005, an
increase of 10.1%.  Commissions and fees rose 8.5% to
$171.9 million during the quarter compared with $158.4 million for
the same period in 2005, primarily reflecting improved organic
growth and acquisitions, offset by a modest overall decline in
premium rates.

Net income for the quarter was $20.6 million compared with
$15.8 million a year ago, an increase of 30.5%.  Operating net
income was $19.2 million compared with $16.5 million a year ago,
an increase of 16.0%.  The new accounting treatment for
stock-based compensation resulted in $1.6 million of additional
compensation expense for the 2006 second quarter.

For the first six months of 2006, total revenues rose 4.9% to
$362.2 million from $345.4 million a year ago.  Commissions and
fees increased 4.0% to $352.3 million from $338.7 million last
year, affected by the same drivers that influenced the second
quarter, in addition to a $3.6 million reduction in contingent
commissions.

Net income was $46.6 million compared with $43.5 million in the
same period of 2005, an increase of 7.0%.  Operating net income
for the period was $44.9 million compared with $43.6 million a
year ago, an increase of 2.9%.  In the 2006 year-to-date period,
compensation expense was increased by $3.4 million from the new
accounting treatment for stock-based compensation.

Organic growth is defined as the change in commissions and fees
before the effect of acquisitions and divestitures.  Excluding
contingent and override commissions, organic growth was 7.8% for
the 2006 second quarter and 5.1% for the first six months of 2006.

The operating margin for the second quarter of 2006 increased to
23.4% from 22.5% for the second quarter of 2005.  For the six
months, the operating margin was 25.9% in 2006 compared with 26.1%
in 2005.  The margin change for the quarter and six months was
affected by the expensing of stock options and continued
investment in sales and service talent, offset in part by a
reduction in legal, compliance and claims expenses.  In addition,
the second quarter margin was favorably affected by the improved
organic growth and the year-to-date margin was negatively impacted
by the reduction in contingent commissions.

"We delivered a strong quarter marked by improved financial and
operating metrics, " Martin L. 'Mell' Vaughan, III, chairman and
chief executive officer, commented.

"The strategic highlights of the quarter and the year-to-date
periods are the emerging benefits from the talent who joined our
company over the past 18 months -- talent that has since become an
integral part of the HRH organization.  This new talent, along
with HRH's existing talent, has greatly enhanced our middle-market
and major account sales and service capabilities.  Recognition of
our superior capabilities by our clients, as well as prospective
clients and acquisition partners, is contributing to our financial
performance."

"The improvement in our organic revenue growth for the quarter
reflected continued strong new business production company-wide
including several very large new accounts, and a rebound in our
renewal retention rates which were under pressure the past few
quarters due to producer culling," F. Michael Crowley, president,
said.

"All six of our retail regions and our excess & surplus lines
operations generated in excess of 5.5% organic growth for the
quarter, evidence that our sales process, which is under constant
refinement, is working.  "Best practices" programs, focused on
continuous improvement of business processes, have now been
instituted in our commercial property/casualty, personal lines and
employee benefits lines of business."

"We interpret our second quarter results as further validation
that our strategies are working effectively and we are headed in
the right direction. On the acquisition front, to date, we have
announced four transactions with annualized revenues of over
$35 million, including a definitive agreement to acquire Chicago-
based Thilman & Filippini, L.L.C., one of the leading firms in its
region.

"In addition, by mid-year 2006, we had repurchased $25.0 million
of HRH shares, and we remain well positioned to support our future
capital needs. In the meantime, we remain relentlessly focused on
serving our clients with distinction in volatile markets, and
making steady progress towards our long-term financial goals," Mr.
Vaughan concluded.

Headquartered in Richmond, Virginia, Hilb Rogal & Hobbs Company
(NYSE:HRH) -- http://www.hrh.com/-- is the eighth largest  
insurance and risk management intermediary in the U.S. and tenth
largest in the world, with over 120 offices throughout the United
States and London.  HRH assists clients manage risks in property
and casualty, employee benefits, professional liability and many
other areas of specialized exposure.  HRH also offers a full range
of personal and corporate financial products and services.

                         *     *     *

As reported in the Troubled Company Reporter on May 1, 2006,
Standard & Poor's Rating Services placed 'BB' rating on Hilb,
Rogal & Hobbs's (NYSE:HRH; BB/Stable/--) $425 million senior
secured credit facility.

As reported in the Troubled Company Reporter on May 1, 2006,
Moody's Investors Service placed a Ba2 rating on Hilb Rogal &
Hobbs Company's new senior secured bank credit facilities.  
Moody's said HRH's rating outlook is stable.


INCO LTD: Gets Raised Offer of $82.50 Per Share from Teck Cominco
-----------------------------------------------------------------
Teck Cominco Limited revised its cash and share offer to acquire
all the outstanding shares of Inco Limited.  Under the revised
offer, Inco shareholders will receive, subject to proration,
CDN$82.50 per Inco share in cash, or 1.1293 Teck Cominco Class B
subordinate voting shares plus CDN$0.05 per Inco share.  The
revised offer represents CDN$40 in cash and 0.5821 of a Teck
Cominco Class B subordinate voting share per Inco share at full
proration.  The expiry time for the revised Teck Cominco offer is
Aug. 16, 2006, at midnight (Toronto time).

"We believe that our revised offer will be very attractive to Inco
shareholders," Don Lindsay, Teck Cominco's President and Chief
Executive Officer, said.  "It is also consistent with our stated
policy that we will take a disciplined approach to this
transaction.  The increased cash component crystallizes
substantial value for Inco shareholders who choose that option.  
The lower number of Teck Cominco shares offered preserves more
value for shareholders who participate in the great potential of
the combined company, including existing Teck Cominco
shareholders.  Inco shareholders have a choice between the
certainty and value of our offer and the highly conditional offer
by Phelps Dodge, which will not close until September, at the
earliest, if at all.  We have all regulatory approvals we require
to complete our offer on August 16.  Inco shareholders should
tender their shares to our offer as soon as possible."

Teck Cominco will pay up to a maximum of CDN$9.1 billion in cash
and will issue up to 132.3 million Teck Cominco Class B
subordinate voting shares pursuant to the revised offer.  This
represents an increase in the cash component of the offer of
CDN$2.7 billion or 43%, and a decrease of 10.7 million shares or
7.5% in comparison to Teck Cominco's original offer.  Teck Cominco
will fund the cash portion of the offer out of its CDN$3.6 billion
of cash on hand and a committed term loan facility.

All other terms of the Teck Cominco offer are unchanged.  Teck
Cominco's offer was conditional on Inco's announced takeover bid
for Falconbridge having been withdrawn or terminated and on the
Inco/Falconbridge support agreement having been terminated in
accordance with its terms.  On July 28, 2006, Falconbridge
reported that the support agreement had been terminated as a
result of the July 27, 2006 expiry of the Inco offer, fulfilling
this condition of our offer.

"This clears the way for our offer to proceed directly to Inco
shareholders," Mr. Lindsay said.  "As we announced on July 21, our
offer remains open until Aug. 16, 2006.  In the meantime, we
continue to assess all relevant developments and market conditions
solely in the context of determining what makes sense for Teck
Cominco shareholders.  We understand the real value that a
combination of Teck Cominco and Inco could mean for our
shareholders, but it is only one of many opportunities that we are
considering.  If the market determines that Inco is worth more
than we are prepared to pay, we will accept that.   We will not be
drawn into a bidding war that would be inconsistent with our
commitment to value for Teck Cominco shareholders."

Teck Cominco expects to mail a formal notice of variation to all
Inco shareholders on or before Aug. 3, 2006.

                       About Teck Cominco

Headquartered in Vancouver, Canada, Teck Cominco Limited (TSX:
TCK.A; TCK.B; NYSE: TCK) -- http://www.teckcominco.com/-- is a  
diversified mining company.  The Company focuses in the production
of zinc and metallurgical coal and also produces copper, gold and
specialty metals.

                         About Inco Ltd.

Headquartered in Sudbury, Ontario, Inco Limited (TSX, NYSE:N) --
http://www.inco.com/-- produces nickel, which is used primarily
for manufacturing stainless steel and batteries.  Inco also mines
and processes copper, gold, cobalt, and platinum group metals.  It
makes nickel battery materials and nickel foams, flakes, and
powders for use in catalysts, electronics, and paints.  Sulphuric
acid and liquid sulphur dioxide are produced as byproducts.  The
company's primary mining and processing operations are in Canada,
Indonesia, and the U.K.

                       *    *    *

Inco Limited's 3-1/2% Subordinated Convertible Debentures due
2052 carry Moody's Investors Service's Ba1 rating.


JABIL CIRCUIT: Completes $200 Million Stock Repurchase Plan
-----------------------------------------------------------
Jabil Circuit, Inc., has completed its $200 million share
repurchase program.  A total of 8,418,700 shares were repurchased
at an average price of $23.76 per share.

"With our continued commitment to working capital discipline, we
have been able to fund strong revenue and earnings growth while
providing a return of capital to shareholders through our dividend
and completing this share repurchase," said Forbes Alexander,
Jabil's Chief Financial Officer.

                       About Jabil Circuit

Jabil Circuit, Inc. (NYSE:JBL) -- http://www.jabil.com/-- is
an electronic product solutions company providing comprehensive
electronics design, manufacturing and product management services
to global electronics and technology companies.  Jabil Circuit has
more than 50,000 employees and facilities in 20 countries.  

Standard & Poor's Ratings Services places a BB+ preliminary rating
on Jabil Circuit's $1.5 billion senior and subordinated debts in  
Aug. 19, 2005.


KEYSTONE AUTO: Moody's Junks $175 Million Senior Sub. Unsec. Notes
------------------------------------------------------------------
Moody's Investors Service affirmed the ratings for Keystone
Automotive Operations, Inc.'s Corporate Family, B2; senior secured
bank facilities, B2; and guaranteed senior subordinated notes,
Caa1. The ratings reflect Keystone's weak credit metrics
following the acquisition of Reliable Investments, Inc. in
December of 2005.  As of April 1, 2006, EBIT coverage was
1x.  The rating outlook is changed to negative.

The negative outlook reflects Moody's concern that current
industry softness, driven by volatile gasoline pricing, will delay
expected improvements in Keystone's credit metrics.  As such,
Keystone may need to amend certain of its covenants in order to
maintain access to its revolving credit facility.   Moody's
continues to expect that the debt reduction benefits from the
anticipated synergies will not be meaningful until 2007.

The ratings affirmed:

B2 rating for the guaranteed senior secured bank credit
facilities, consisting of:

   * $50 million revolving credit facility due 2008;

   * $115 million term loan due 2009;

   * $90 million incremental guaranteed senior secured term loan
     due 2010

   * Caa1 rating for $175 million guaranteed senior subordinated
     unsecured notes due 2013;

   * Corporate Family Rating of B2

The last rating action for Keystone was on Nov. 29, 2005 when the
ratings were lowered.

Future events that have the potential to lower Keystone's ratings
include: any material deterioration in the company's operating
margins; an erosion in the inventory and working capital
management systems that results in working capital consumption
of cash and weakening liquidity, or higher leverage resulting from
additional acquisitions.  Consideration for lower ratings could
result if any combination of the above factors results in EBIT
deteriorating below 1x, or pro forma Debt increasing to
6x.

Future events that have the potential to improve Keystone's rating
outlook include: successful integration of the Reliable
acquisition combined with improved margins.  These factors could
result in a material de-leveraging of the company's balance sheet
over the intermediate term. Consideration for higher ratings could
result if the company's performance results in EBIT improving
above 1.5x or pro forma Debt improving to 4.5x.

Keystone, headquartered in Exeter, Pennsylvania, competes as a
leading distributor in the specialty accessories and equipment
segment of the broader automotive aftermarket equipment industry.  
Keystone's specialty products are used by consumers to improve the
performance, functionality, and appearance of their vehicles.  
The company sells only a nominal dollar amount of commodity
replacement parts.  Keystone is presently the dominant player in
the Northeast, with a strong presence as well in the Midwest,
the Southeast, and Canada.  Keystone's revenues approximate
$640 million.


LAM RESEARCH: Earns $122.1 Million in Quarter Ended June 25
-----------------------------------------------------------
Lam Research Corporation disclosed earnings for the quarter ended
June 25, 2006.  Revenue for the period was $525.6 million and net
income was $122.1 million compared to revenue of $437.4 million
and net income of $86.3 million for the March 2006 quarter.

Ongoing net income increased to $139.0 million in the June 2006
quarter compared with ongoing net income of $93.7 million for the
March 2006 quarter.

Gross margin for the June 2006 quarter was $274.2 million compared
to gross margin of $219.7 million for the March 2006 quarter.  
Gross margin as a percent of revenue for the June 2006 quarter
increased to 52.2% compared to 50.2% in the March 2006 quarter
primarily due to product mix, revenue growth, and improved
utilization of factory and field resources.  Operating expenses
increased during the quarter as planned to $114.7 million compared
to operating expenses of $109.4 million for the March 2006
quarter.  Equity compensation expense in the June 2006 quarter
recorded in cost of goods sold and operating expenses was
$1.2 million and $4.2 million, respectively.

Cash and cash equivalents, short-term investments and restricted
cash and investments balances were $1.5 billion at the end of
June, and cash flows provided by operating activities were
$92.3 million during the quarter.  Deferred revenue and deferred
profit balances were $229.7 million and $140.1 million,
respectively.  At the end of the period, unshipped orders in
backlog were approximately $521 million, and the anticipated
future revenue value of orders shipped from backlog to Japanese
customers that are not recorded as deferred revenue was
approximately $74 million.

"We are pleased with the results for the June quarter," stated
Steve Newberry, Lam's president and chief executive officer.  "Our
market share gains and the increased capital investment by our
customers drove our new orders substantially above expectations.
Our financial results in June demonstrate our commitment to
delivering profitable market share growth, with operating margins
at 30% for the quarter.  In addition, our total net cash balance
at $1.2 billion is at the highest level ever recorded by the
Company."

"The Company hosted an Analyst and Investor Meeting during last
week's SEMICON(R) West industry trade show.  During that meeting,
we outlined our key areas of focus: executing to the near-term
needs of our customers, extending our market leadership in etch,
leveraging our global etch knowledge into adjacent markets, and
delivering best-in-class financial performance.  We believe we are
well positioned to deliver strong results in all four areas as we
go forward over the next few years," Mr. Newberry concluded.

Headquartered in Fremont, California, Lam Research Corporation
(NASDAQ: LRCX) -- http://www.lamrc.com/-- supplies wafer  
fabrication equipment and services to the world's semiconductor
industry.

                          *     *     *

As reported in the Troubled Company Reporter on March 22, 2006,
Standard & Poor's Ratings Services revised its outlook on
Lam Research Corp. to positive from stable; and affirmed the
company's 'BB-' corporate credit rating.  The outlook revision
reflected a strengthened financial profile, which features ample
liquidity and no funded debt, in conjunction with improved, albeit
still volatile, operating performance.


LINN ENERGY: Acquires Blacksand & Kaiser Units for $416 Million
---------------------------------------------------------------
Linn Energy, LLC, signed definitive purchase agreements to acquire
certain affiliated entities of Blacksand Energy, LLC, located in
the Los Angeles Basin, for $291 million and certain Mid-Continent
assets of Kaiser-Francis Oil Company located in Oklahoma for
$125 million, in each case subject to customary closing
adjustments.

The Company anticipates both acquisitions will close on or before
August 15, 2006 and will be financed with a combination of
borrowings under Linn Energy's existing credit facility and a
new bridge facility.

Profile of the Blacksand Assets:

   * Located in the Brea Olinda Field of Orange County,
     California

   * Includes 270 producing wells

   * 31.3 MMBOE of proved reserves

   * 90% crude oil

   * 88% proved developed

   * 39 year reserve life index

Profile of the Kaiser Assets:

   * Located in North Central Oklahoma
   * Includes 411 producing wells
   * 54.5 Bcfe of proved reserves
   * 84% natural gas
   * 43% proved developed
   * 26 year reserve life index

Both acquisitions are characterized by long-lived reserves and low
natural decline rates and complement Linn Energy's existing asset
profile.  In particular, we expect that the acquisitions will
provide these benefits:

   * Anticipated significant additional accretion: As previously
     announced, Linn Energy management expects to recommend to
     the Board of Directors an increase in the annualized cash
     distribution to $1.72 per unit beginning with the   
     distribution for the third fiscal quarter.   As a result
     of these acquisitions, management currently anticipates
     that it will recommend that the Board of Directors consider
     a further increase in the annualized cash distribution
     beginning with the fourth fiscal quarter of 2006;

   * Oil and gas mix: At December 31, 2005, Linn Energy's proved
     reserves were approximately 99% natural gas.  Pro forma for
     the acquisitions, Linn Energy's proved reserves will be
     approximately 55%-65% natural gas.  The Blacksand Assets
     will add considerable exposure to oil and allow Linn Energy
     to benefit by hedging substantial crude oil volumes at
     current, historically high prices into the future;

   * Geographic diversification: The acquisitions allow Linn
     Energy to diversify its operations across other regions and
     basins of the United States, establishing a foothold in
     California and the Mid-Continent, while continuing to
     develop its existing core natural gas operations in
     Appalachia;

   * Acquisition and development opportunities: New operating
     regions provide Linn Energy with further opportunities for
     consolidation, in addition to increasing production on the
     acquired properties through enhancement and optimization
     projects in California and accelerated drilling in Oklahoma;          
  
   * Stable production: Both acquisitions exhibit very low   
     decline rates and long reserve lives in excess of 39 years
     for the Blacksand Assets and 26 years for the Kaiser Assets;

   * Low operating costs: The Blacksand Assets' integrated
     infrastructure results in a low operating cost structure, and
     Linn Energy will benefit from Kaiser-Francis' continued low
     cost operation in Oklahoma; and

   * Experienced operators: The Blacksand Assets' operating team
     has significant experience, with an average of 20 years in
     the Brea Olinda Field and 30 years in the industry, and is
     expected to continue to operate the assets under a transition
     services agreement.  Upon the expiration of such agreement,
     it is anticipated that substantially all of the operating
     team will become employees of Linn Western Operating,  Inc.,
     a newly formed wholly owned subsidiary of Linn Energy.  
     Kaiser-Francis will operate the Kaiser Assets on behalf of
     Linn Energy for the foreseeable future following the closing.

The acquisitions will be financed with a combination of
borrowings under Linn Energy's secured revolving credit facility
and a $250 million, 365-day bridge facility.  In connection with
the acquisitions, Linn Energy's lenders under its credit facility
have agreed in principle, subject to customary approvals, to an
increase in the facility size from $400 million to $800 million
and an increase in the borrowing base from $265 million to
$480 million.  Consistent with Linn Energy's strategy of hedging
a significant percentage of its production, the Company intends
to enter into additional arrangements to hedge a substantial
portion of the acquired production volumes at closing.  Both
acquisitions are subject to customary closing conditions and
purchase price adjustments, but neither is conditioned on the
closing of the other transaction.

"We are pleased to announce these acquisitions, which we expect
will be immediately accretive and which will diversify our
business and enhance our ability to provide stability and growth
in distributions to our unitholders," said Michael C. Linn,
Chairman, President and Chief Executive Officer of Linn Energy.

"The Blacksand and Kaiser acquisitions reflect our ongoing
business strategy of consolidating long-lived natural gas and oil
properties and establish new core operating areas to increase
our growth potential.  Our management team has considerable
experience across the United States, and we will continue to
target strategic acquisitions, both in the Appalachian Basin
and elsewhere, which increase our distributable cash flow."

Management will host a conference call shortly after closing to
discuss these acquisitions and issue revised guidance.

Significant shareholders of Blacksand Energy, LLC include funds
managed by Kayne Anderson Capital Advisors, Jefferies Capital
Partners and Wells Fargo Energy Capital.  Randall & Dewey, a
division of Jefferies and Company, Inc., acted as financial
advisor to Blacksand Energy in this transaction.

                       About Linn Energy

Headquartered in Pittsburgh, Pennsylvania, Linn Energy LLC
(Nasdaq: LINE) -- http://www.linnenergy.com/-- is an independent   
natural gas company focused on the development and acquisition of
natural gas properties in the Appalachian Basin, primarily in West
Virginia, Pennsylvania, New York and Virginia.

At March 31, 2006, the Company's balance sheet showed $105,187,000
in unitholders' capital compared to a $46,831,000 unitholders'
deficit at March 31, 2005.

Linn Energy filed its quarterly report on Form 10-Q for the three
months ended March 31, 2006, with the Securities and Exchange
Commission on June 30, 2006.  As a result of the filing, Linn
Energy is now current in its periodic reporting requirements with
the SEC.  

This report concludes the Troubled Company Reporter's coverage of
Linn Energy, until facts and circumstances, if any, emerge that
demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.


LOVESAC CORP: Court Confirms Chapter 11 Joint Plan of Liquidation
-----------------------------------------------------------------
The Honorable Christopher S. Sontchi of the U.S. Bankruptcy Court
for the District of Delaware confirmed the Joint Plan of
Liquidation of LoveSac Corporation and its debtor-affiliates on
July 27, 2006.    

The Court determined that the Plan satisfies the 13 requirements
imposed by Section 1129(a) of the Bankruptcy Code.

                       Treatment of Claims

As reported in the Troubled Company Reporter on June 19, 2006,
under the Plan, these claims are entitled to full recovery:

   1. Class 1 Other Priority Claims;
   2. Class 2 Secured Tax Claims;
   3. Class 4-C Secured Claims of Celtic Bank Corp.;
   4. Class 4-F Secured Claims of G&G LLC;
   5. Class 4-G Secured Claims of REM LLC;
   6. Class 4-H Secured Claims of Triple Net Investments; and
   7. Class 4-K Miscellaneous Secured Claims.

Pursuant to an asset purchase agreement, five creditors agreed to
assign any distribution received on their claims to the
liquidating trust for the sole benefit of the Class 5A through 5E
Unsecured Creditors.  These creditors will not receive any
distribution on account of their claims:

   1. Class 4-A Secured Claims of Barfair, Ltd.;

   2. Class 4-B Secured Claims of Brand Equity Ventures II, LP;

   3. Class 4-D Secured Claims of Dinesh Patel;

   4. Class 4-J Secured Claims of Walnut Investment
      Partners, LP; and

   5. Class 4-J Secured Claims of Walnut Private Equity Fund, LP.

The Debtors will surrender a 2003 Ford Econoline Van to Ford
Credit in full satisfaction of Ford Credit's secured claim.

Class 3 DIP Financing Claims will be assumed by the purchaser,
without recourse to the Debtors or the Liquidating Trust.  The
Debtors' estates will have no further liability for the claims
upon assumption.

Holders of these claims will receive a pro rata share of their
claims from 0% to 50%:

   1. Class 5-A General Unsecured Claims;
   2. Class 5-B Deficiency Claim of G&G;
   3. Class 5-C Triple Net Investments Deficiency Claim;
   4. Class 5-D Celtic Bank Deficiency Claims; and
   5. Class 5-E REM Deficiency Claim.

Class 5-F Series A Deficiency Claims and Class 6 Interest Claims
will receive nothing under the Plan.

A full-text copy of LoveSac Corp.'s Chapter 11 Liquidation Plan is
available for a fee at:

    http://www.researcharchives.com/bin/download?id=060616052444  

A Disclosure Statement explaining that Plan is available
for a fee at:

    http://www.researcharchives.com/bin/download?id=060616052013  

Headquartered in Salt Lake City, Utah, The LoveSac Corporation --
http://www.lovesac.com/-- operates and franchises retail stores
selling beanbags furniture.  The LoveSac Corp. and three
affiliates filed for chapter 11 protection on Jan. 30, 2006
(Bankr. D. Del. Case No. 06-10080).  Anthony M. Saccullo, Esq.,
and Charlene D. Davis, Esq., at The Bayard Firm and P. Casey
Coston, Esq., at Squire, Sanders & Dempsey LLP represent the
Debtors in their restructuring efforts.  Michael W. Yurkewicz,
Esq., at Klehr Harrison Harvey Branzburg & Ellers represents the
Official Committee of Unsecured Creditors.  When the Debtors filed
for protection from their creditors, they estimated assets and
debts between $10 million to $50 million.


MAGUIRE PROPERTIES: S&P Raises $432 Mil. Facilities' Rating to BB+
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit ratings assigned to Maguire Properties Inc. and Maguire
Properties L.P.

At the same time, the rating assigned to a $332 million term loan
and $100 million revolving credit facility (collectively referred
to as "the facilities") is raised to 'BB+', and the related
recovery rating is revised to '1' from '3'.  The outlook is
stable.

"The revision of the recovery rating reflects $118 million
of prepayments on the term loan from the initial balance of
$450 million, as well as a reduction in on-balance-sheet mortgage
debt, which increases the equity interest pledged as collateral,"
explained Standard & Poor's credit analyst Tom Taillon.  

"We also expect significant additional prepayments within the next
six months."

Maguire has two forward-lending commitments that will replace
existing mortgages and provide approximately $280 million in
proceeds that will be used to pay down the facilities.

"Excess cash flow or a possible residential land sale will likely
pay off any remaining balance on the term loan by year-end 2006,"
Mr. Taillon noted.

As of March 31, 2006, there was no outstanding balance on the
revolving credit facility.

A solid asset base with well-structured leases and high-quality
tenants provides for reasonable predictability of cash flow in the
near term.  The company's aggressive use of leverage and currently
weak coverage measures limit the corporate credit rating, although
strengthening of the financial risk profile could lead to a
revision of the outlook to positive.  Should expected improvements
in cash flow fail to materialize and coverage of the common
dividend deteriorates, an outlook revision to negative may be
warranted.


MANITOWOC CO: 2006 2nd Quarter Net Income Increases to $42.2 Mil.
-----------------------------------------------------------------
The Manitowoc Company disclosed record levels of net sales and
earnings for the second quarter ended June 30, 2006.

Net sales increased 27% to $746.2 million from $589.6 million
during the second quarter of 2005.  

The Company earned $42.2 million of net income on $746.2 million
of net sales for the second quarter ended June 30, 2006, compared
with $24.1 million of net income on $589.6 million of net sales
for the same period in 2005.

"The Manitowoc Company's outstanding financial performance
reflects our leading position in the global lifting industry
coupled with continued solid contributions from our Foodservice
and Marine segments," Terry D. Growcock, Manitowoc's chairman and
chief executive officer, said.

"Manitowoc Crane Group's backlog exceeded $1 billion during the
quarter.  By continuing to place orders for our cranes and related
products, our customers continue to validate our product and
service leadership positions.  We leveraged that customer demand
into record revenue for the group, while significantly improving
operating margins during the second quarter.

"Since the end of the quarter, we have announced our intent to
explore a strategic acquisition in the Foodservice segment,"
Growcock said.

"While we are restricted from providing in-depth comments on that
proposal at this time, as we previously stated this possible
transaction is consistent with our strategic direction and would
create a similar global product and service leadership model in
our Foodservice segment that has proven so successful in our Crane
segment."

                     Business Segment Results

Second-quarter 2006 net sales in the Crane segment increased 33%
to $570.0 million, from $427.0 million in the second quarter of
2005.  Operating earnings for the second quarter of 2006 increased
113% to $75.6 million, from $35.5 million in the same period last
year.  The strength of the Crane segment's end markets is
reflected in its backlog, which totaled $1.1 billion, an increase
of 13 percent from March 31, 2006, and up 110% from June 30, 2005.

"Our Crane segment again delivered exceptionally strong
performance," Growcock said.  "Operating margins reached 13.3% for
the quarter as we are enjoying the benefits of higher throughput
in our factories.  Product demand remains strong in all regions
and across all product categories.  The $1 billion backlog
milestone confirms that our customers see long-term demand for
technologically advanced lifting equipment.  We are minimizing
the impact on lead times by streamlining manufacturing operations,
using best-in-class sourcing programs to maintain supply chain
integrity, and ramping up production in our new Chinese
manufacturing facility."

In the Foodservice segment, second-quarter 2006 net sales
increased 9% to $113.3 million from $103.7 million last year.  
Operating earnings for the second quarter of 2006 were
$17.8 million, a 9% increase from the prior-year period.  The
solid increase in both revenue and operating profit reflects the
benefits of new product introductions, operating efficiencies from
an earlier plant consolidation in its refrigeration operations,
and higher demand in comparison to the 2005 quarter, which
experienced cooler-than-normal weather across much of the country.

"Foodservice experienced a very strong quarter," Growcock said.
"New products in the ice division have increased our domestic
share in that market to record levels.  

"Furthermore, we believe that additional growth opportunities will
result as several national restaurant accounts are developing site
refresh/renovation plans for later this year or in early 2007.  
This should also benefit our beverage business, where we completed
a niche acquisition during the quarter that expanded our product
line and deepened strategic vendor relationships.  Refrigeration
continues to benefit from last year's plant consolidation
activities and ongoing Six Sigma initiatives.  

"The Foodservice segment should also begin to reap the benefits in
2007 from the staggered roll-outs this year of our new ERP system
and establishment of a shared services organization that will
consolidate certain backroom functions across the group. This is
an important investment that is necessary to meet our long-term
growth and profitability objectives."

Revenues for the Marine segment during the second quarter of 2006
rose 7% to $62.9 million from $58.9 million in the second quarter
of 2005.  Operating earnings for Marine were $1.9 million in the
second quarter of 2006 compared to an operating loss of $600,000
in the second quarter of 2005.

"The Marine segment posted another quarter of improved
profitability," Growcock said.  "Our largest single project, the
Littoral Combat Ship for the U.S. Navy, remains on schedule for
its September launch and the recent award of the Coast Guard's
RB-M project will further strengthen our position in government
programs.  On the commercial side, our backlog of several OPA-90
tank barges, which is among the largest of any U.S. shipbuilder,
will provide a steady stream of repeat work that leverages the
strengths of our facilities and workforce," Growcock said.

                       Strategic Priorities

"Manitowoc's Vision 2010 is the next generation of our management
roadmap that we are using to guide our efforts in creating value
for the company's shareholders," Growcock said.

"This simple objective -- value creation -- is the end result of
hundreds of decisions that the company's managers make on a daily
basis.  We focus these decisions into several broad strategic
priorities, each of which must ultimately lead to value creation.  
Our six strategic priorities are outlined as:

   -- Growth:

      We seek to achieve and maintain global market leadership in
      our Crane and Foodservice businesses.  The Crane segment has
      benefited from a series of strategic acquisitions that
      generated strong global cross-selling and manufacturing
      opportunities. Management believes that similar
      opportunities exist in the Foodservice segment.  The Marine
      segment is focused on specific product niches within its
      Great Lakes base of operations that provide solid
      opportunities and long-term profit potential.

   -- Innovate:

      We understand our customers and their needs, and we work
      with them to develop new products that enhance their
      businesses. For example, our Foodservice segment recently
      launched several products that deliver a basic beverage
      component -- ice -- in crushed or cube form at the
      customers' preference.  Our new residential line of ice
      machines brings Manitowoc's commercial-quality ice into the
      home, office, or small business.

   -- Customer Focus:

      Our products are world-class and so is our aftermarket
      support.  Our Crane CARE network provides 24/7 support to
      crane operators around the world.  By year-end, we will have
      expanded our call center networks to Europe and Asia, so
      customers in those regions can access real-time technical
      expertise to keep their Manitowoc Crane Group products
      running smoothly, efficiently, and productively.  The
      Foodservice segment's ongoing commitment to an ERP system
      will also enhance customer focus, providing national
      accounts with a unified front for their purchasing needs.

   -- Excellence in Operations:

      Strong market demand puts a premium on operational
      excellence.  The ability to deliver high-quality products on
      schedule and within acceptable pricing parameters during
      times of robust market activity is a key to Manitowoc's
      long-term success. We leverage our global scale through
      enterprise-wide adoption of global sourcing strategies,
      Six Sigma, and other methodologies to ensure that our
      customers have total confidence in our commitment to meeting
      their needs.

   -- People and Organizational Development:

      We identify and train leaders on a global basis through a
      series of personnel and management development programs.
      These programs not only ensure that critical positions are
      staffed with talented managers, but that high potential
      leaders are nurtured and retained for long-term management
      and executive roles.

   -- Create Value:

      The upturn in our end markets as well as our numerous
      strategies to capitalize on this trend have resulted in
      Manitowoc's generation of shareholder value, as measured by
      the EVA methodology, of more than $52 million through the
      first six months of 2006. Throughout 2006, our focus on
      working capital, raw material sourcing, competitive pricing,
      and world-class manufacturing have enabled Manitowoc to
      significantly exceed our historical EVA metrics, and we hold
      ourselves to continued high standards of value creation."

Headquartered in Maniwotoc, Wisconsin, The Manitowoc Company, Inc.
(NYSE: MTW) -- http://www.manitowoc.com/-- provides lifting
equipment for the global construction industry, including lattice-
boom cranes, tower cranes, mobile telescopic cranes, and boom
trucks.  As a leading manufacturer of ice-cube machines,
ice/beverage dispensers, and commercial refrigeration equipment,
the company offers the broadest line of cold-focused equipment in
the foodservice industry.  In addition, the company is a leading
provider of shipbuilding, ship repair, and conversion services for
government, military, and commercial customers throughout the
maritime industry.

                         *     *     *

As reported in the Troubled Company Reporter on May 25, 2006,
Moody's Investors Service affirmed the debt ratings of The
Manitowoc Company, Inc. -- Corporate Family Rating at Ba3, Senior
Unsecured Notes at B1, and Senior Subordinate Notes at B2.  
Moody's said the outlook is changed to positive from stable.

As reported in the Troubled Company Reporter on March 27, 2006,
Standard & Poor's Ratings Services raised its ratings on
The Manitowoc Co. Inc., including its corporate credit rating to
'BB' from 'BB-'.


MATHON FUND: Asks Court Approval on Stipulation in Aid of Plan
--------------------------------------------------------------
Mathon Fund LLC and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Arizona to approve a stipulation
resolving their disputes with James C. Sell, their conservator,
the Arizona Corporation Commission, Duane Slade and Guy Andrew
Williams.

The Debtors explain that the approval of the Stipulation is a
prerequisite to proceeding with the joint Plan of Reorganization
they filed with the Bankruptcy Court on July 7.

              Arizona Corporation Commission Action

In April 2005, the ACC commenced an action in the Superior Court
for Maricopa County in Arizona against the Debtors, Messrs. Slade
and Williams and related entities seeking among others, the
appointment of a receiver over the assets of the Defendant
Entities for violations of the Arizona Securities laws.  

The Superior Court appointed James C. Sell as Receiver of the
Defendant Entities.  

By subsequent agreements duly approved by the Superior Court, the
Receivership was continued and the name was changed to
Conservatorship.

                       ACC Action Settlement

To further resolve the dispute in the ACC Action, the Debtors, the
Conservator, the ACC, and Messrs. Slade and Williams agree, among
others, that:

   1) Messrs. Slade and Williams will transfer to the Debtors
      substantially all of their exempt property, to be
      liquidated and to be placed in a participating trust for
      future distribution through a bankruptcy proceeding.  A
      significant portion of the assets are held by W.S.F. --
      World Sports Fans.

   2) Parties who agreed to participate in the Plan, vote in
      favor of the Plan, and are not non-participant, will be
      entitled a pro-rata distribution from the Participating
      Trust established with the proceeds from the assets of
      Messrs. Slade and Williams.

   3) All parties to the Stipulation will release each other
      from any further liability arising out of the ACC Action.

   4) Investors who vote in favor of a confirmed plan, and are
      participants to that plan, agree to release, and forever
      discharge Messrs. Slade and Williams from any liability
      arising out of the events that gave rise to the ACC Action.

   5) Non-participants to the plan will retain their rights and
      claims against Messrs. Slade and Williams and will be
      subject to avoidance claims by the Debtors.  They will not
      participate in the distribution from the Participating
      Trust.  If more than 10% of the allowed claims of investors
      choose to be non-participants, the Stipulation is void,
      unless waived by the parties.

   6) The ACC will receive a $750,000 payment from Messrs.
      Slade and Williams for damages ACC incurred in the ACC
      Action, which payment will be made from future revenue
      obtained by Messrs. Slade and Williams.  Payment to the
      ACC will not be made from any of the assets that are
      subject to the Participating Trust.

   7) Messrs. Slade and Williams will provide the other parties
      to the Stipulation information relating to the:

      -- properties, assets and liabilities of the Debtors;
         or

      -- investments of and distributions to investors in the
         Debtors.

A full-text copy of the Stipulation is available for a fee at:

  http://www.ResearchArchives.com/bin/download?id=060731031541

A hearing to consider the Stipulation in Aid of Plan of
Reorganization is set for Aug. 17, 2006, 9:45 a.m. at Courtroom
702, 7th Floor, 230 N. First Avenue, in Phoenix, Arizona.

Headquartered in Phoenix, Arizona, Mathon Fund LLC and its
debtor-affiliates filed for chapter 11 protection on Nov. 13, 2005
(Bankr. D. Ariz. Case Nos. 05-27993 through 05-27995).  
Lawrence E. Wilk, Esq., at Jaburg & Wilk, P.C. represents the
Debtors in their restructuring efforts.  Alan A. Meda, Esq., at
Stinson Morrison Hecker LLP represents the Official Committee of
Unsecured Creditors.  When Mathon Fund filed for protection from
its creditors, it listed assets totaling $16,851,721 and debts
totaling $79,259,996.


MATHON FUND: Brings In Brownstein Hyatt as Special Counsel
----------------------------------------------------------
Mathon Fund LLC and its debtor-affiliates obtained permission from
the U.S. Bankruptcy Court for the District of Arizona to employ
Eric R. Burris, Esq., and Brownstein Hyatt & Farber, P.C. as
special counsel, nunc pro tunc to April 25, 2006.

Mr. Burris and Brownstein Hyatt will continue to represent the
Debtors in a real property dispute with Raven II Holdings LLC.

According to the Debtors, Raven, while asserting a claim on the
Debtors' real property in New Mexico, attempted to sell the
Property without first obtaining an order for relief from stay
from the Bankruptcy Court.  

The Debtors then advised Raven of its willful violation of
Sec. 362 of the Bankruptcy Code and demanded that no funds from
the sale be disbursed absent an order of the Bankruptcy Court.

On April 25, 2006, Raven filed another action in the State Court
in New Mexico to obtain the funds.  

The Debtors, through Mr. Burris and Brownstein Hyatt, are now
seeking transfer of Raven's New Mexico action to the Court.

The services of Mr. Burris and Brownstein Hyatt's other
professionals will paid based on these rates:

         Professional       Hourly Rate
         ------------       -----------
         Partner            $245 - $750
         Associate          $160 - $275
         Administrative      $65 - $155

Mr. Burris, a shareholder and partner at Brownstein Hyatt assures
the Court that neither he nor the Firm holds any interest adverse
to the Debtor.

Headquartered in Phoenix, Arizona, Mathon Fund LLC and its
debtor-affiliates filed for chapter 11 protection on Nov. 13, 2005
(Bankr. D. Ariz. Case Nos. 05-27993 through 05-27995).  
Lawrence E. Wilk, Esq., at Jaburg & Wilk, P.C. represents the
Debtors in their restructuring efforts.  Alan A. Meda, Esq., at
Stinson Morrison Hecker LLP represents the Official Committee of
Unsecured Creditors.  When Mathon Fund filed for protection from
its creditors, it listed assets totaling $16,851,721 and debts
totaling $79,259,996.


MAXXAM INC: PALCO Names George O'Brien as New President and CEO
---------------------------------------------------------------
The Pacific Lumber Company, a subsidiary of MAXXAM Inc., disclosed
that George A. O'Brien, formerly Senior Vice President with
International Paper Company, is the new president and chief
executive officer.

Mr. O'Brien was responsible for the overall forest products group
while at IP until his retirement in mid-2005.  Robert Manne, who
has been chief executive officer since 2001, will continue for one
year as a consultant.

Charles Hurwitz, chief executive officer of MAXXAM Inc., said, "I
am deeply appreciative of the efforts of the employees of PALCO
who continue to do an outstanding job, and I look forward to
assisting George in his efforts to keep PALCO headed in the right
direction.  He successfully ran IP's forest products business,
which included one of the largest timber operations in the world
and a major wood products business, and I am confident that George
will add to the long and proud traditions of The Pacific Lumber
Company."

Mr. Hurwitz went on to say, "All of the people associated with
PALCO owe Robert a deep debt of gratitude for his efforts, and we
are very pleased that he will remain as a consultant for a year,".

Headquartered in Houston, Texas, MAXXAM Inc. (AMEX: MXM) operates
businesses ranging from aluminum and timber products to real
estate and horse racing.  MAXXAM's top revenue source is Kaiser
Aluminum, which has been in Chapter 11 bankruptcy since 2002.
MAXXAM's timber subsidiary, Pacific Lumber, owns about 205,000
acres of old-growth redwood and Douglas fir timberlands in
Humboldt County, California.  MAXXAM's real estate interests
include commercial and residential properties in Arizona,
California, Texas, and Puerto Rico.  The Company also owns the Sam
Houston Race Park, a horseracing track near Houston.  Its Chairman
and CEO, Charles Hurwitz, controls 77% of MAXXAM.

                         *     *     *

Maxxam's balance sheet at March 31, 2006, showed $1.013 billion in
total assets and $1.684 billion in total liabilities, resulting in
a $671.3 million total stockholders' deficit.


MCCLATCHY CO: TRO Request to Bloc MediaNews Sale Denied   
-------------------------------------------------------
A U.S. District Court judge in San Francisco has denied a request
for a temporary restraining order to block The McClatchy Company's
proposed sale of the San Jose Mercury News and Contra Costa Times
to MediaNews Group, Inc., and the Monterey (CA) Herald and the
St. Paul Pioneer Press to The Hearst Corporation.  The TRO had
been requested by the plaintiff to delay the closure of the sale
in connection with a lawsuit filed against MediaNews, Hearst,
Stephens Group Inc., Gannett Co. Inc. and California Newspapers
Partnership.

On April 26, 2006, McClatchy announced a definitive agreement with
MediaNews and Hearst under which the companies will pay McClatchy
$1 billion to acquire the four newspapers.  On June 13, 2006, the
U.S. Department of Justice notified McClatchy of a request for
additional information concerning the sale of the San Jose Mercury
News and Contra Costa Times in California to MediaNews.  McClatchy
has responded promptly to the DOJ's request for additional
information and is continuing to actively assist the DOJ with its
inquiry.

                           About McClatchy

The McClatchy Company -- http://www.mcclatchy.com/-- is the  
second-largest newspaper company in the United States, with 32
daily newspapers and approximately 50 non-dailies.  McClatchy-
owned newspapers include the (Minneapolis) Star Tribune, the Miami
Herald, The Sacramento Bee, the Fort Worth Star- Telegram, the
Kansas City Star, the Charlotte Observer, and The (Raleigh) News &
Observer.  In addition, McClatchy has a network of internet
assets, including leading local websites in each of its daily
newspaper markets, offering readers information, comprehensive
news, advertising, e-commerce and other services.  The company
also owns and operates McClatchy Interactive, an interactive
operation that provides websites with content, publishing tools
and software development; Real Cities --
http://www.RealCities.com/-- a national network of city and  
regional web sites, operating in more than 110 U.S. markets, and
is part owner of CareerBuilder, an online classified employment
listing service.  McClatchy also owns 25 percent of Classified
Ventures, a newspaper industry partnership that includes such
online classified web sites as cars.com and apartments.com.

                         *     *     *

As reported in the Troubled Company Reporter on April 24, 2006,
Moody's Investors Service assigned a Ba1 Corporate Family Rating
to The McClatchy Company and a Ba1 rating to McClatchy's proposed
$3.75 billion senior unsecured bank credit facility, and lowered
its commercial paper rating to Not Prime from Prime-3.  The rating
actions conclude the review for downgrade initiated on March 13,
2006 in connection with the company's announced $6.5 billion
acquisition of Knight-Ridder.  The rating outlook is stable.


MCLEODUSA INC: Former CEO Pays $4.4 Million to Settle Lawsuit
-------------------------------------------------------------
Clark McLeod, former chairman and chief executive of McLeodUSA
Incorporated, has agreed to pay $4.4 million to settle an
investigation for allegedly profiting in initial public offerings
of shares, according to the New York State Attorney General's
Office.

The settlement dismisses Attorney General Eliot Spitzer's "IPO
spinning" case against Mr. McLeod.  There was no admission of
liability.

The lawsuit alleges that Mr. McLeod received stock in 34 companies
before their initial public offerings in exchange for directing
$77 million of McLeod Inc.'s money to Salomon Smith Barney, a unit
of Citigroup Inc., from 1997 to 2000.  The practice is known as
spinning.  Mr. McLeod allegedly received $10 million in profits
from the transactions.

Headquartered in Cedar Rapids, Iowa, McLeodUSA Incorporated --
http://www.mcleodusa.com/-- provides integrated communications
services, including local services in 25 Midwest, Southwest,
Northwest and Rocky Mountain states.  The Debtor and its
affiliates filed for chapter 11 protection on Oct. 28, 2005
(Bankr. N.D. Ill. Case Nos. 05-53229 through 05-63234).  Peter
Krebs, Esq., and Timothy R. Pohl, Esq., at Skadden, Arps, Slate,
Meagher and Flom, represent the Debtors in their restructuring
efforts.  As of June 30, 2005, McLeodUSA Incorporated reported
$674,000,000 in total assets and $1,011,000,000 in total debts.
Judge Squires confirmed the Debtors' Joint Prepackaged Plan of
Reorganization on Dec. 16, 2005, and that plan took effect on
Jan. 6, 2006.

McLeodUSA Inc. previously filed for chapter 11 protection on
Jan. 30, 2002 (Bankr. D. Del. Case No. 02-10288).  The Court
confirmed the Debtor's chapter 11 plan on April 5, 2003, and
that Plan took effect on April 16, 2002.  The Court formally
closed that case on May 20, 2005.


MICROISLET INC: To Sell $3.9 Million of Common Stock
----------------------------------------------------
MicroIslet, Inc., entered into agreements for the sale of common
stock for gross proceeds of approximately $3.9 million.   The
purchasers include new and existing institutional and other
accredited investors.  The company agreed to sell an aggregate
of approximately 2.6 million shares and to issue to the investors
five-year warrants to purchase an aggregate of approximately
1.4 million shares.  The company agreed to file a
registration statement covering the resale of the shares
issued in this offering and the shares issuable upon exercise
of the warrants.
  
"The proceeds of the financing are expected to be used for working
capital purposes to advance the company's recent successes in
primates towards development of clinical studies," said Dr. James
R. Gavin III MD, PhD, the company's President and Chief Executive
Officer.

                       Going Concern Doubt

Deloitte & Touche LLP, in San Diego, California, raised
substantial doubt about MicroIslet 's Inability to continue as a
going concern after auditing the Company's consolidated financial
statements for the year ended Dec. 31, 2005.  The auditor pointed
to the Company's incurred substantial operating losses and
negative operating cash flows.

                        About MicroIslet

Headquartered in San Diego, California, MicroIslet, Inc.,
-- http://www.microislet.com-- engages in Biotechnology  
research and development in the field of medicine for people
with diabetes.  MicroIslet's patented islet transplantation
technology, licensed from Duke University, includes methods
for cryopreservation and microencapsulation.


OMNICARE INC: Launches Omnicare Full Potential Program
------------------------------------------------------
Omnicare, Inc., reported the implementation of the "Omnicare Full
Potential" Plan, a major initiative designed to re-engineer its
pharmacy operating model to increase efficiency and enhance
customer growth.  It is expected that this program will be
completed by year-end 2008.

   -- Initiative Based on "Hub and Spoke" Model and Aimed
      at Increasing Efficiency and Enhancing Customer Focus

   -- 30-Month Program Expected to Reduce Costs by
      $100 Million-$120 Million

"At Omnicare, we continually seek opportunities to streamline our
operating infrastructure to improve customer service and maximize
efficiencies in order to maintain our low-cost leadership in the
industry," said Joel F. Gemunder, president and chief executive
officer of Omnicare.  

"This process, which builds on the 'hub-and-spoke' concept we have
been developing for some time, has led us to the point where we
are now ready to undertake 'Omnicare Full Potential' We believe
the plan will enhance our pharmacy distribution system, customer
focus and service."

                       Transformation Plan

The "Omnicare Full Potential" Plan is designed to optimize
resources across the organization through a three-pronged
approach:

   -- Best Practices to include implementation of new standard
      operating procedures as well as the realignment and right-
      sizing of functions in preparation for "hub and spoke"   
      consolidation;

   -- Hub and Spoke to include the transfer of key support
      functions and the consolidation of production functions,
      most of which are currently duplicated in many pharmacy
      locations, into regionalized hubs. The "hubs" will take
      advantage of scale and automation, whereas resources
      concentrated at the local community level, or "spoke"
      pharmacies, will focus on customer facing processes;

   -- Net customer growth to include the optimization of service
      delivery and the redesign of customer-facing processes and
      organization to provide more opportunities for customer
      interaction and satisfaction.

The "Omnicare Full Potential" Plan will realign key functions such
as billing, collections, medical records and clinical program
support into regional hubs.  Routine refilling of prescriptions,
representing approximately two-thirds of prescriptions filled,
will also be moved to production hubs across the country where
such processes can be automated effectively.  By shifting certain
of the routine production and support functions from the local
community pharmacies to regional hubs, Omnicare's "spoke"
pharmacies will focus resources on providing high quality customer
service and growth as well as attend to time-sensitive tasks such
as "first-dose" prescriptions, emergencies and delivery.  While
the Company does not expect the net number of operating locations
to change significantly, the investment in assets and resources
will be realigned, with "spoke" pharmacies requiring lower
staffing, operating costs and capital investment along with
increased staffing and investment in "hub" locations.

                         Financial Impact

The "Omnicare Full Potential" Plan is expected to generate pretax
savings in the range of $100 million to $120 million annually upon
completion of the initiative by the end of 2008.  In addition,
reductions in inventory and other working capital are projected to
generate $50 million to $100 million in cash by the completion of
the program.

The program will result in total pretax restructuring and related
charges of approximately $80 million over the 30-month period.   
These charges include severance pay, lease costs, professional
fees and other related costs.  Approximately $15 million of this
restructuring charge will be taken in 2006, with $8.4 million in
the quarter ended June 30, 2006 and the remainder taken over the
balance of the year.  The remainder of the restructuring charge
will be recognized and disclosed over the fiscal years 2007 and
2008 as various phases of the project are finalized and
implemented.  Incremental capital expenditures related to this
program are expected to total $30 million to $40 million over
the 30-month period.  The Company believes that the estimated
$100 million to $120 million in annualized savings, when compared
with the restructuring charge and related capital expenditures,
represents an attractive payback.

"Omnicare must continue to meet the demands of the nation's
healthcare system for cost containment and enhanced patient care.   
The 'Omnicare Full Potential' Plan will allow Omnicare to take
advantage of economies of scale, standardization and automation to
increase efficiency across our enterprise," said Mr. Gemunder.

"More importantly, we believe that by creating more opportunities
for direct customer interaction, this improved operating model
will have a salutary impact on patient care, customer retention
and growth.  Bottom line, we see this program as leveraging the
benefits and strengths of our business platform and our growth
strategy."

Headquartered in Covington, Kenturcy, Omnicare, Inc.,
-- http://www.omnicare.com-- provides pharmaceutical care
for the elderly.  Omnicare serves residents in long-term care
facilities comprising approximately 1,090,000 beds in 47 states
in the United States and in Canada, making it the largest U.S.
provider of professional pharmacy, related consulting and data
management services for skilled nursing, assisted living and
other institutional healthcare providers.  Omnicare also provides
clinical research services for the pharmaceutical and
biotechnology industries in 30 countries worldwide.

                         *     *     *

Omnicare Inc.'s 8-1/8% Series B Senior Subordinated Notes,
maturing on 2011, carry Moody's Investors Service's Ba3 rating.


PARAMOUNT RESOURCES: S&P Affirms Junks Ratings With Stable Outlook
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'CCC+' long-term
corporate credit and its 'CCC' senior unsecured debt ratings on
Calgary, Alta.-based Paramount Resources Ltd.  The outlook is
stable.  

"The affirmation reflects Paramount's credit profile remaining
consistent with the 'CCC+' ratings category since the trust
spinoff completed in April 2005," said Standard & Poor's credit
analyst Jamie Koutsoukis.  "Although Paramount continues to spend
significantly more than its operating cash flows on its capital
program, the company has yet to realize any material reserves or
production improvements that could have strengthened its business
profile.

Furthermore, Paramount continues to outspend internally generated
cash flows, limiting its ability to strengthen its financial
profile," Ms. Koutsoukis added.

The ratings on Paramount reflect the company's:

   * low reserve life index;

   * high finding and development costs associated with its
     properties;

   * high leverage when measured on a debt per net proven barrels
     of oil equivalent basis; and

   * near-term negative free cash flow.

The stable outlook reflects Standard & Poor's expectation that
Paramount's credit profile will remain relatively unchanged in the
near term.

Although the company will outspend its internally generated cash
flows as it works to increase its production and reserves, debt
levels should not rise significantly, as the company will likely
use a mix of debt, equity, and asset rationalizations to fund the
shortfall.

A negative rating action could occur if there is a sustained
weakness in financial metrics and free cash flow generation, or if
Paramount is unable to economically develop its proven reserves
meaningfully.

Alternatively, a positive rating action would depend on Paramount
successfully demonstrating internal reserve and production growth
while improving its financial flexibility by maintaining a stable
break-even cost profile and lowering its finding and development
costs.


PATRON SYSTEMS: Settles 94.1% of Eligible Claims
------------------------------------------------
The Board of Directors of Patron Systems, Inc., terminated its
Creditor and Claimant Liabilities Restructuring Program.

On July 21, 2006, the Board of Directors disclosed that debts,
claims and other liabilities totaling $29,592,756 have been
settled for 36,990,946 shares of Series A-1 Preferred Stock.
Additionally, the Company has settled claims totaling $382,584 for
$12,140.  The total of all claims settled represents 94.1% of the
eligible claims.

"We are pleased that our creditors have joined with the
Patron stockholders to help put Patron back on a firm financial
footing," Patron's CEO Robert Cross said.  "This program has
successfully restructured our balance sheet and provided Patron
with the ability to continue to grow and develop its products and
business in the Active Message Management market."

"We believe that we have competitive, market leading products
offered in a market area with high growth potential.  With the
restructured balance sheet that the liabilities restructuring
program has provided, we will be able to further finance the
growth of our business."

                        Going Concern Doubt

As reported in the Troubled Company Reporter on May 16, 2006,
Marcum & Kliegman LLP expressed substantial doubt about Patron
Systems, Inc.'s ability to continue as going concern after
auditing the Company's financial statements for the year ended
Dec. 31, 2005.  The accounting firm pointed to the Company's net
losses incurred since its inception, its working capital
deficiency and the numerous litigation matters it is involved
with.

                       About Patron Systems

Headquartered in Boulder, Colorado, Patron Systems, Inc.
(OTCBulletin Board: PTRS) -- http://www.patronsystems.com/--  
offers integrated enterprise email and data security and
enforceable compliance.  The Company'ssuite of Active Message
Management(TM) products addresses eform creation, capture,
sharing, and manages data in an industry standard format as well
as providing solutions for mailbox management, email policy
management, email retention policies, archiving and eDiscovery,
proactive email supervision, and protection of messages and their
attachments in motion and at rest.


PERFORMANCE TRANSPORTATION: Sets Up Claims Settlement Protocol
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of New York
approves Performance Transportation Services, Inc., and its
debtor-affiliates proposed procedures for:

   a. settling non-tax threatened or actual claims and causes of
      action brought by or against the Debtors in a judicial,
      administrative, arbitral or other action or proceeding;

   b. settling tax claims; and

   c. maintaining a claims register.

The Debtors anticipate that a substantial number of claims could
be filed in their Chapter 11 cases.  The Debtors note that they
have approximately 1,500 creditors.

The Debtors also have asserted, or will assert, various claims
and causes of action against numerous third parties through
litigation, administrative action or arbitration.  Similarly,
third parties hold various claims and causes of action against
the Debtors.

To minimize administrative expenses in settling the claims, the
Debtors propose to implement procedures to resolve those claims.

With the procedures, the Debtors will avoid the cost of having
counsel draft and file numerous motions and send out numerous
hearing notices, Garry M. Graber, Esq., at Hodgson Russ LLP, in
Buffalo, New York, points out.  The procedures will also reduce
the burden on the Court's docket, while protecting the interests
of all creditors through the notice and objection procedures, Mr.
Graber adds.

                    Claim Settlement Procedures

The Debtors will settle claims that do not exceed certain dollar
amounts.  For purposes of determining the applicable dollar
amount to permit the settlement of the claim, the Settled Amount
must equal the dollar amount that the Debtors and the claimant
ultimately agree on.

A. Non-Tax Claims Procedures

   For Non-Tax Claims involving non-insider third parties against  
   the Debtors, or the Debtors against the Settling Parties, as
   well as any cross-claims and counter-claims asserted against  
   the Debtors by Settling Parties, the Debtors will enter into  
   settlements pursuant to these procedures:

      1. No settlement will be agreed to unless it is reasonable
         in the business judgment of the affected Debtor.

      2. No settlement will be effective unless executed by an
         authorized representative of the relevant Debtor.

      3. With respect to any Settled Amount that is equal to or
         less than $15,000, the affected Debtor, in its       
         discretion, may agree to settle the claim or cause of    
         action on any reasonable terms, and may enter into,
         execute and consummate a written settlement that will be
         binding on it and its estate without notice by the
         Debtor to any third party or further action by the
         Court.

      4. For any Settled Amount greater than $15,000 but does not
         exceed $50,000, the Debtor may agree to settle the claim
         or cause of action only if:

            (i) it provides written notice to the United States
                Trustee for Region 2, counsel to the Debtors'
                secured lenders, and counsel to the Official
                Committee of Unsecured Creditors -- the Negative
                Notice Parties -- of the terms of the settlement;
                and

           (ii) the terms are not objected to in writing by any
                of the Negative Notice Parties within 10 days
                after the date of service of the written notice,
                by filing the objection with the Court and
                serving it to:

                   Kirkland & Ellis LLP
                   200 E. Randolph Dr., Chicago
                   Illinois 60601,
                   Attn: James A. Stempel and James W. Kapp III,

                so that it is received on or before the 10th day
                after the date of service of the written notice.

         In the absence of any objection, the Debtor may enter
         into, execute and consummate a written agreement of
         settlement that will be binding on it and its estate.

      5. If any of the Negative Notice Parties object to any
         settlement and the Debtor still desires to enter into
         the proposed settlement with the Settling Party, the
         execution of the settlement will not proceed except on:

            (i) resolution of the objection; or

           (ii) further Court order after a hearing.

   The Settlement Procedures for Non-Tax Claims do not apply to
   settlements involving the reclassification of Non-Tax Claims.

B. Procedures for Tax Claims

   The Settlement Procedures for Tax Claims provide that:

      1. The Debtor may settle any Tax Claim for an amount not to
         exceed $125,000, without notice or a hearing.

      2. No settlement will be agreed to unless it is reasonable
         in the business judgment of the affected Debtor.

      3. No settlement will be effective unless it is executed by
         an authorized representative of the relevant Debtor

      4. A settlement of a Tax Claim will be effective only if:

            (i) the Debtors provide a copy of the proposed
                settlement to the Negative Notice Parties; and

           (ii) none of the Negative Notice Parties object to the
                settlement within 10 days of receipt.

         If the Negative Notice Parties do not object to the
         settlement within 10 days of receipt, they will be
         deemed to have consented to, and the Debtors will be
         authorized to execute, the settlement.

      5. If any of the Negative Notice Parties objects to the
         settlement, the Debtors will seek to resolve, in good
         faith, the objection.  If the objection cannot be
         resolved, the Debtors may request Court approval of the
         settlement.

Any settlement that is not authorized pursuant to the Claim
Settlement Procedures, or pursuant to any other Court order, will
be authorized only on a separate Court order on a motion of the
appropriate Debtor served on the necessary parties-in-interest.

No later than 45 days after each quarter, the Debtors will file
with the Court and serve on all affected claimholders and the
Negative Notice Parties, a statement with respect to each
quarter.  The statement will include the names of each affected
claimholder and the terms of each settlement reached during the
quarter.

The Claim Settlement Procedures are not intended to alter any
requirements under the Debtors' insurance policies, Mr. Graber
notes.

                    Claims Register Procedures

BMC Group, Inc., the Debtors' official claims and noticing agent,
will maintain a register of claims filed in the Debtors' Chapter
11 cases.  The Debtors anticipate that some filed claims will
name a certain Debtor, which name may not match the Debtor
reflected in the claim's supporting documentation.

The Debtors also expect that claimants will often provide written
documentation subsequent to filing a claim, which will provide
additional information as to the appropriate Debtor against whom
the claim is asserted.

The Claims Agent will enter claims in the Claims Register
pursuant to these procedures:

   1. Where the Debtor listed on a proof of claim form does not
      match the Debtor listed on the supporting documentation to
      the claim, the Claims Agent may enter the claim on the
      Claims Register as if filed against the Debtor identified
      in the supporting documentation to the claim without
      further action by the Court provided that the Claims Agent
      will provide written notice to the claimant of the
      docketing.   The claimant may oppose the docketing.

   2. Where the Debtors distributed a personalized proof of claim
      form listing the scheduled amount of the claim and the
      claimant simply returned the form in blank, the Claims
      Agent will docket the blank proof of claim as if asserted
      in the amount listed in the personalized proof of claim
      form.

   3. Where claimants:

         (i) state in their proofs of claim, or in supporting
             documentation that they are "not interested in a
             claim," or "do not have a claim;" or

        (ii) write "N/A" on their proof of claim and fail to
             provide supporting documentation,

      the Claims Agent will treat the claims as withdrawn
      provided that the Claims Agent will provide written notice
      to the claimant of the treatment and the claimant may
      oppose the treatment.

Headquartered in Wayne, Michigan, Performance Transportation
Services, Inc. -- http://www.pts-inc.biz/-- is the second largest    
transporter of new automobiles, sport-utility vehicles and light
trucks in North America.  The Company provides transit stability,
cargo damage elimination and proactive customer relations that are
second to none in the finished vehicle market segment.  The
company's chapter 11 case is administered jointly under Leaseway
Motorcar Transport Company.

Headquartered in Niagara Falls, New York, Leaseway Motorcar
Transport Company Debtor and 13 affiliates filed for chapter 11
protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107).
James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A.
Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq.,
at Hodgson Russ LLP represent the Debtors in their restructuring
efforts.  David Neier, Esq., at Winston & Strawn LLP, represents
the Official Committee of Unsecured Creditors.  When the Debtors
filed for protection from their creditors, they estimated assets
between $10 million and $50 million and more than $100 million in
debts.  (Performance Bankruptcy News, Issue No. 11; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


PERFORMANCE TRANSPORTATION: Assumes Corporate Lodging Contract
--------------------------------------------------------------
Performance Transportation Services, Inc., and its debtor-
affiliates sought and obtained authority from the U.S. Bankruptcy
Court for the Southern District of New York to assume a contract
with Corporate Lodging Consultants, Inc., dated Sept. 22, 2004, as
modified pursuant to an addendum to the Contract.

Since the Debtors primarily provide vehicle-hauling delivery
services from a vehicle distribution point or terminal to a
vehicle dealership over distances up to 300 miles, their drivers
frequently require overnight lodging during the completion of
their duties.  Pursuant to the Contract, CLC obtains hotel rooms
for the Debtors' employees at reduced rates and guarantees that
the employees will not be turned away from the hotels.  

The Debtors estimate that CLC's lodging program resulted in
multi-million dollar savings to the Debtors.  During the fourth
quarter of 2005, the Debtors estimate CLC's services to have
saved them approximately $524,856.  

CLC is the only provider of the services large enough to handle
the demand created by the Debtors' services, Garry M. Graber,
Esq., at Hodgson Russ LLP, in Buffalo, New York, tells Judge
Kaplan.

Pursuant to the Addendum to the Contract, the parties agree to
modify certain terms and extend the Contract through October 1,
2008.

In exchange for CLC's agreement to execute the Addendum renewing
its relationship with the Debtors for another two years, the
Debtors will pay CLC $156,948 representing the full amount of
prepetition fees owed to it.

CLC acts as a conduit for the receipt and processing of billings
from the overnight lodging facilities by periodically providing
the Debtors with a single consolidated invoice for the overnight
lodging costs incurred during the previous period, Mr. Graber
notes.   Hence, the prepetition fees owed to CLC are ultimately
owed to the various overnight lodging facilities with which CLC
secured lodging for the Debtors' traveling employees.

Headquartered in Wayne, Michigan, Performance Transportation
Services, Inc. -- http://www.pts-inc.biz/-- is the second largest    
transporter of new automobiles, sport-utility vehicles and light
trucks in North America.  The Company provides transit stability,
cargo damage elimination and proactive customer relations that are
second to none in the finished vehicle market segment.  The
company's chapter 11 case is administered jointly under Leaseway
Motorcar Transport Company.

Headquartered in Niagara Falls, New York, Leaseway Motorcar
Transport Company Debtor and 13 affiliates filed for chapter 11
protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107).
James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A.
Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq.,
at Hodgson Russ LLP represent the Debtors in their restructuring
efforts.  David Neier, Esq., at Winston & Strawn LLP, represents
the Official Committee of Unsecured Creditors.  When the Debtors
filed for protection from their creditors, they estimated assets
between $10 million and $50 million and more than $100 million in
debts.  (Performance Bankruptcy News, Issue No. 11; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


PHIBRO ANIMAL: Moody's Junks Rating on $80 Million Senior Notes
---------------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to the proposed
senior subordinated note offering of Phibro Animal Health
Corporation.  At the same time, Moody's affirmed the existing
ratings of Phibro, including the B2 corporate family rating.  The
outlook for all ratings is stable.

Moody's understands that the proposed $80 million of senior
subordinated notes reflect a revision to the refinancing
transaction rated by Moody's on July 13, 2006 in which Moody's
assigned a B3 rating to $240 million of senior unsecured notes.   
Moody's understands that the size of the senior unsecured note
offering will be reduced to $160 million, and that the total size
of the debt offering remains $240 million.

The notes will be sold in a privately negotiated transaction
without registration rights under the Securities Act of 1933 under
circumstances reasonably designed to preclude a distribution
thereof in violation of the Act.  This issuance has been designed
to permit resale under rule 144A.

At the close of the transaction, Moody's anticipates withdrawing
the ratings on Phibro's existing senior notes due 2007 and
subordinated notes due 2008.

Moody's understands that Phibro's pro forma capital structure will
be comprised primarily of:

   (1) a $65 million senior secured revolving credit facility
       expected to be undrawn at close;

   (2) $160 million of new senior unsecured notes due 2013;

   (3) $80 million of new senior subordinated notes due 2014; and
  
   (4) various international credit facilities totaling
       approximately $10 million in the aggregate.

Moody's understands that borrowers under the revolving credit
facility include the parent and domestic subsidiaries, and that
guarantors include these same entities.  The credit facility
benefits from security consisting of a first priority perfected
lien on property and assets of borrowers and guarantors.  Moody's
understands that the senior unsecured notes and the senior
subordinated notes will be guaranteed by the same entities
guaranteeing the bank facility.

The B3 rating on the senior unsecured notes reflects their
position as unsecured creditors, as well as structural
subordination relative to liabilities of the non-guarantor
subsidiaries.  The Caa1 rating on the senior subordinated notes
reflects their contractual subordination to the senior unsecured
notes.

Rating assigned:

   * Senior subordinated notes of $80 million due 2014 -- Caa1

Rating affirmed:

   * Corporate family rating -- B2
   * Senior unsecured notes of due 2013 -- B3

Ratings affirmed and expected to be withdrawn at the
completion of the refinancing:

   * Senior secured notes due 2007 - B2
   * Senior subordinated notes due 2008 - Caa2

Headquartered in Ridgefield Park, New Jersey, Phibro Animal Health
Corporation is a diversified manufacturer of a broad range of
animal health and nutritional products.  For the twelve month
period ended March 31, 2006, Phibro reported net sales of
approximately $388 million.


POTLATCH CORP: DBRS Holds Rating on Senior Sub. Debt at BB(low)
---------------------------------------------------------------
Dominion Bond Rating Service confirmed the Senior Unsecured debt
and Senior Subordinated debt of Potlatch Corporation at BB (high)
and BB (low).  The trend is Stable.

   * Senior Unsecured Debt Confirmed BB (high) Stb
   * Senior Subordinated Debt Confirmed BB (low) Stb

The current rating continues to reflect the Company's business
risks which are in line with the forest product industry
average and also recognizes the weaker lumber and sawlog market
conditions that are expected to reduce profitability in the next
two years.

Overriding the negative short term outlook are the current strong
credit metrics that will compensate for an extended period of
weaker market conditions.  North American building products
markets are forecasted to be weaker in 2006 and 2007 as high
housing prices and rising mortgage rates reduce housing demand.   
Lumber and sawlog prices are expected to decline, but to levels
that will allow producers to remain profitable.  Tissue products
are expected to provide a stable source of earnings partially
compensating for the weaker business segments.  However, the net
effect is forecasted to be a reduction in earnings from 2005
levels.

Despite a weaker earnings outlook, free cash flow is expected to
be marginally positive for the foreseeable future.  However,
annual distributions to shareholders of $76 million and moderate
capital expenditures are not expected to leave sufficient cash to
reduce debt from current levels.  Potlatch had cash and available
credit facilities of $163 million at March 31, 2006 and liquidity
should not be a problem in the near term.  The Company has
additional financial flexibility in the form of timberland
assets that can be easily monetized.  The estimated U.S.
private timberland market value of $1 billion provides support
to Potlatch's long-term debt.

The Company intends to grow its timberlands business through
acquisitions and a period of weak earnings, and debt-financed
acquisitions would negatively impact credit quality.  A major
debt-financed acquisition during soft market conditions would
pressure the rating.


PREMIUM PAPERS: Wants to Sell All of Smart Papers' Assets
---------------------------------------------------------
Premium Papers Holdco, LLC, and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to approve
procedures governing the sale of substantially all of the assets
of Debtor Smart Papers, LLC.

Smart Papers owns paper machine operations, distribution center,
and headquarters facility located in Hamilton, Ohio.  

The Debtors, their lenders and a unnamed potential purchaser
continue to negotiate in an attempt to arrive at a definitive
agreement.  However, the Debtors have determined, in consultation
with their lenders and Giuliani Capital Advisors, LLC, the
Debtor's investment bankers, that it is in the best interest of
the Debtors' estate to begin the formal solicitation on bids, to
test the broader public marketplace.

The Debtors ask the Court to set Aug. 14, 2006, as the bid
deadline for interested parties to deliver copies of their bids
to:

      (a) Debtors' investment banker

          Giuliani Capital Advisors LLC
          Attention: Phillip Van Winkle
          233 South Wacker Drive
          Chicago, IL 60606
      
      (b) Debtors' counsel

          Young, Conaway, Stargatt & Taylor LLP
          Attention: Robert S. Brady, Esq.
          The Brandywine Building
          1000 West Street, 17th Floor, P.O. Box 391
          Wilmington, DE 19899
          
      (c) counsel to Wachovia Bank, N.A.

          Otterbourg, Steindler, Houston & Rosen, P.C.
          Attention: Andrew Kramer, Esq.
          230 Park Avenue
          New York, NY 10169      

      (d) counsel to the Official Committee of Unsecured Creditors

          Lowenstein Sandler, P.C.
          65 Livingston Avenue
          Roseland, NJ 07068

If more than one qualified bids are received, the Debtors will
conduct an auction on Aug. 15, 2006, at the offices of the
Debtors' counsel.

The Court will consider approval of a sale on Aug. 21, 2006.

Headquartered in Hamilton, Ohio, Premium Papers Holdco, LLC, --
http://www.smartpapers.com/-- is an independent manufacturer and
marketer of a wide variety of premium coated and uncoated printing
papers, such as Kromekote, Knightkote, and Carnival.   The Company
and its debtor-affiliates, SMART Papers LLC and PF Papers LLC,
filed for chapter 11 protection on March 21, 2006 (Bankr.
D.Del.Case No. 06-10269).  Ian S. Fredericks, Esq., at Young,
Conaway, Stargatt & Taylor, LLP, represents the Debtors.  Traxi
LLC serves as the Debtors' financial advisor.  When the Debtors
filed for protection from their creditors, they listed unknown
estimated assets and $10 million to $50 million estimated debts.


RADNET MANAGEMENT: Moody's Junks $135 Million Sr. Sec. Term Loan
----------------------------------------------------------------
Moody's Investors Service assigned a (P)B2 rating to the proposed
first lien credit facilities of RadNet Management, Inc., a
subsidiary of Primedex Health Systems, Inc. consisting of a
$45 million senior secured first lien revolving credit facility
and an $225 million senior secured first lien term loan.  Moody's
concurrently assigned a (P)Caa1 rating to the proposed
$135 million senior secured second lien term loan and a
speculative grade liquidity rating of SGL-2.

Moody's also affirmed the corporate family rating of RadNet at B3,
and has changed its outlook to positive.  Proceeds derived from
the new credit facilities will be utilized to finance the cash
equity purchase price of Radiologix, Inc., refinance existing
indebtedness of RadNet and RGX and pay transaction
fees and expenses.

These summarizes the ratings assigned:

   * $45 million revolving credit facility due 2011, (P)B2
   * $225 million first lien term loan due 2012, (P)B2
   * $135 million second lien term loan due 2013, (P)Caa1

These summarizes the ratings affirmed:

   * Corporate family rating, B3
   * Speculative grade liquidity rating, SGL-2

These summarizes the ratings to be withdrawn at the close of the
acquisition of Radiologix by RadNet Management, Inc.:

   * $15 million revolving credit facility due 2011, B3
   * $85 million first lien term loan due 2011, B3
   * $60 million second lien term loan due 2012, Caa1

The assignment of the prospective ratings on the first lien debt
at (P)B2 and the affirmation of the B3 Corporate Family Rating
primarily reflect Moody's belief that the liquidity of the merged
company will be stronger than Primedex on a standalone basis.

Liquidity aided by cost savings and substantial net operating loss
carryforwards partially offset the impact of:

   1) a very material, albeit manageable effect of forthcoming
      Medicare reimbursement changes on the combined company;

   2) high capital requirements and operating leverage; and

   3) modest free cash flow and high financial leverage.

Moody's views the proposed combination favorably for several
reasons:

   1) the combined entity will have a larger, more diverse
      footprint;

   2) the merger will improve purchasing leverage of the combined
      entity;

   3) the combination will afford material cost savings;

   4) the transaction combines two companies with a modern
      equipment fleet; and

   5) the acquisition will enable the utilization of substantial
      net operating loss carryforwards.

Assimilation risk, while considered to be material by Moody's, is
lessened by the fact that the companies employ similar operating
models, occupy complementary footprints in California and will
have an opportunity to save substantial costs through the
reduction in duplicative corporate expenses.

The positive outlook primarily reflects Moody's belief that the
liquidity of the merged company will be stronger than Primedex on
a standalone basis.

Downward rating pressure could develop if the ratio of debt to
EBITDA increases above 7 x or if the ratio of free cash flow to
debt declines to a level below -2% on a sustained basis.   Upward
rating pressure could materialize if the ratio of adjusted free
cash flow to debt improves to a level of 3% to 5% or if the
Medicare reimbursement changes are in some way modified or
repealed.

Primedex Health Systems, Inc. provides diagnostic imaging services
through a network of 62 fixed-site, free-standing outpatient
imaging centers, consisting of 36 multi-modality
and 26 single-modality facilities, in the state of California.  
For the twelve months ended March 31, 2006, the company recognized
revenue of approximately $154 million.


RESORT OF PALM BEACH: Case Summary & 11 Largest Unsec. Creditors
----------------------------------------------------------------
Debtor: Resort of Palm Beach, LLC
        700 South Rosemary Avenue
        West Palm Beach, FL 33401

Bankruptcy Case No.: 06-10798

Type of Business: The Debtor operates a beach resort.

Chapter 11 Petition Date: July 31, 2006

Court: District of Delaware (Delaware)

Debtor's Counsel: James C. Carignan, Esq.
                  Davide B. Stratton, Esq.
                  Pepper Hamilton LLP
                  Hercules Plaza, Suite 5100
                  1313 Market Street
                  Wilmington, DE 19801
                  Tel: (302) 777-6500
                  Fax: (302) 421-8390

                       -- and --

                  Douglas E. Spelfogel
                  Baker & Hostetler LLP
                  666 Fifth Avenue
                  New York, NY 10103
                  Tel: (212) 589-4200

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 11 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
CityPlace Retail, LLC            Rent/Others           $445,600
700 South Rosemary Avenue
West Palm Beach, FL 33401

Venture Bank                     Loan                   $82,875
721 College Street, Southeast
Lacey, WA 98509-3800

Sadis & Goldberg, LLC            Legal Fees             $59,384
551 Fifth Avenue
New York, NY 10176

Rewards Network Establishment                           $40,000
Services, Inc.
3675 Crestwood Parkway
Suite 270
Duluth, GA 30096

Florida Department of Revenue                           $33,528
5050 West Tennessee Street
Tallahassee, FL 32399

Waste Management                 Trade Debt             $17,202

Florida Power & Light            Utility                 $4,500

Jain & Associates, LLC           Accounting Fees         $3,550

ASCAP                            Music License Fee       $2,020

Department of Business and                               $1,000
Prof. Regulation

Bell South                       Utility                   $500


REFCO INC: RCM Unit's Organizational Meeting Set for August 2
-------------------------------------------------------------
Diana G. Adams, the acting United States Trustee for Region 2,
will convene an organizational meeting of the unsecured creditors
in Refco Capital Markets, Ltd.'s case at 10:00 a.m. on August 2,
2006, according to the U.S. Trustee's Web site.

The meeting will be held at the United States Trustee Meeting
Rooms, at 80 Broad Street, 2nd floor, in New York.

                       About Refco Inc.

Based in New York, Refco Inc. -- http://www.refco.com/-- is a
diversified financial services organization with operations in
14 countries and an extensive global institutional and retail
client base.  Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the most
active members of futures exchanges in Chicago, New York, London
and Singapore.  In addition to its futures brokerage activities,
Refco is a major broker of cash market products, including foreign
exchange, foreign exchange options, government securities,
domestic and international equities, emerging market debt, and OTC
financial and commodity products.  Refco is one of the largest
global clearing firms for derivatives.

The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts.  Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors.  Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.

Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134).  Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada.  Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc.  Albert Togut, the chapter 7
trustee, is represented by Togut, Segal & Segal LLP.

On April 13, 2006, the Court appointed Marc S. Kirschner as Refco
Capital Markets Ltd.'s chapter 11 trustee.  Mr. Kirschner is
represented by Bingham McCutchen LLP.  RCM is Refco's operating
subsidiary based in Bermuda.

Three more affiliates of Refco, Westminster-Refco Management LLC,
Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed
for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case
Nos. 06-11260 through 06-11262).  (Refco Bankruptcy News, Issue
No. 36; Bankruptcy Creditors' Service, Inc., 215/945-7000).


REXAIR HOLDINGS: Moody's Rates Proposed $120 Mil. Sr. Loan at B1
----------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Rexair Holdings,
Inc.'s proposed $120 million first lien senior secured credit
facility and affirmed the B1 rating for the existing $15 million
first lien senior secured revolving credit facility.   The
company's existing first lien term loan is being increased by
approximately $50 million, proceeds of which will be used to repay
in full the existing $30 million second lien term loan and to fund
a shareholder distribution.  Moody's will withdraw the second lien
term loan rating upon repayment of the facility.  The outlook
remains stable.

The ratings are supported by Rexair's consistently high operating
margins, the global diversification of the company's sales and the
modest leverage for the B1 rating category.  Ratings benefit from
the low working capital risks inherent in Rexair's business model.  
The ratings are constrained by the single product nature of the
company and its limited distribution channel.  Following the
transaction, Moody's expects pro forma leverage to be under
4x, interest coverage in excess of 3x and free cash flow of 13%.

The stable rating outlook reflects expectations the company will
maintain adequate margins and profitability in a very competitive
marketplace despite its limited product offering and distribution
model.  The stable outlook also incorporates Moody's belief that
the company will maintain financial metrics at the stronger end of
the rating category to mitigate business risks.

Positive rating pressure could build if Rexair's operating margin
is maintained at levels above current levels, interest coverage
approaches 5x, and debt drops substantially below 3x for a
sustained period.  Negative rating action could result from any
disruption in its distribution model that results in reduced unit
sales and a deterioration in Rexair's operating margin to below
20%, a decrease in interest coverage below 3x, or an increase in
its leverage to above 5x.

The first lien term loan and revolving credit facility will be
guaranteed by the company's subsidiaries and secured by a first
lien on the assets of Rexair and its subsidiaries.  The senior
secured credit facility will contain certain financial covenants
including interest coverage, total leverage, and fixed charge
coverage.  As the rated debt will comprise substantially all debt
of Rexair the rating assigned is the same as the corporate family
rating.  The ratings assigned are subject to the receipt of final
documentation with no material changes to the terms as originally
reviewed by Moody's.

This ratings were assigned:

   * $119.5 million senior secured 1st lien term loan at B1

This ratings were affirmed:

   * $15.0 million senior secured revolving credit facility at       
     B1,

   * Corporate Family Rating at B1,

Rexair Holdings, Inc., based in Troy Michigan, is the manufacturer
and distributor of the Rainbow Cleaning System, a premium vacuum
cleaner.  The company, founded in 1935, markets its products
throughout the world and has just 50% of its sales in the United
States.  For the fiscal year ended Sept. 30, 2005, the company
reported net sales of approximately $105 million.


REXAIR LLC: S&P Affirms B Corp. Credit Rating With Stable Outlook
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on
Troy, Michigan-based Rexair LLC, including the 'B' corporate
credit rating.  The rating outlook is stable.  Approximately
$122 million of debt is affected by this action.

The affirmation follows the announcement of Rexair's plan to add
on $50 million to its existing first-lien term loan, which will be
used primarily to repay its $30 million second-lien term loan and
fund a shareholder dividend.  The secured loan rating on the
first-lien facility was affirmed at 'B' (at the same level as the
corporate credit rating) and the recovery rating was affirmed at
'5', indicating the expectation for negligible (0%-25%) recovery
of principal in the event of a payment default.

At closing of the add-on facility, the 'CCC+' secured debt and '5'
recovery ratings on the second-lien term loan will be withdrawn.

Pro forma for the planned $50 million first-lien bank facility
add-on, the company's credit protection measures (adjusted for
operating leases) remain weak.  The transaction is expected to
increase debt leverage to about 3.8x from 3.4x, yet leverage will
remain in line with the existing 'B' rating.

However, the debt-financed dividend does represent a more
aggressive financial policy than had previously been factored into
the rating.  As a result, there is no room for any further
increase in leverage in the current rating outlook.  The outlook
could be revised to negative if debt leverage exceeds 4x over the
near term.  The current rating also does not factor in any
additional shareholder dividends in the near term.

"The rating on Rexair reflects the risks of direct-sales
distribution and the discretionary nature of the company's
products, its narrow business focus, and a highly leveraged
financial profile," said Standard & Poor's credit analyst Patrick
Jeffrey.

Rexair, founded in 1935, is a leading manufacturer of premium
household canister vacuum cleaning systems.  The company sells its
products through a network of independent global distributors,
with about half of its sales and profits derived from the U.S.
The more than $3 billion U.S. vacuum cleaning industry is mature
and highly competitive, with several significantly larger
companies that possess greater financial resources.

Rexair holds only a nominal share of the overall U.S. vacuum
cleaning market, even though it is a leading participant in the
segment for premium-priced direct sale vacuums.  Given the
company's participation in the premium-price sector of the market,
weakening economic conditions could affect future financial
performance. (Rexair is a privately held company, and does
not publish public financial statements.)


RIEFLER CONCRETE: Sells All Assets to United Materials for $5.3MM
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of New York
allowed Riefler Concrete Products, LLC, and Riefler Real Estate
Corporation to sell substantially all of their assets to United
Materials, LLC, for $5,313,996 free and clear of liens, including
but not limited to:

   -- those arising out of defaults under any contracts and leases
      to which the Debtors are or have been a party;

   -- those arising out of any pending or threatened litigation to
      which the Debtors are or may be a party;

   -- those granted or imposed by Court orders;

   -- those arising from the assessment of taxes with respect to
      the Debtors, their properties, or employees;

   -- those claims, demands, obligations and liabilities that are
      in any way related to or arising from the Debtors'
      employment practices, collective bargaining agreements,
      employees' wages, benefits and other employees' claims and
      rights, including without limitation any claims made under
      the Worker Adjustment and Retraining Notification Act; or

   -- those liens and claims arising from all present and future
      liability resulting from hazardous or toxic waste.   

Bruce F. Smith, Esq., at Jager Smith P.C., in New York City, told
the Court that the sale represents a significant positive step in
the Debtors' efforts to maximize the value for their creditors and
to retain jobs in the community.  As would be expected, the
Debtors' cessation of operations prior to their bankruptcy filing
created significant doubt concerning the value of their assets.
The consummation of the transactions contemplated by the Asset
Purchase Agreement will allow the Debtors to discharge most of
their secured financing obligations, and may provide for a
dividend to the Debtors' unsecured creditors.  

Headquartered in Hamburg, New York, Riefler Concrete Products, LLC
-- http://www.riefler.com/-- manufactures and distributes
licensed concrete masonry products, and offers concrete
construction and filling services.  The Company and its affiliate,
Riefler Real Estate Corp., filed for chapter 11 protection on
June 12, 2006 (Bankr. W.D. N.Y. Case No. 06-01574).  Bruce F.
Smith, Esq., at Jager Smith P.C., represent the Debtors in their
restructuring efforts.  When they filed for bankruptcy, the
Debtors reported assets and debts amounting between $10 million to
$50 million.


ROTEC INDUSTRIES: Hires Sonnenschein Nath as Legal Counsel
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave Rotec
Industries, Inc., permission to retain Sonnenschein Nath &
Rosenthall LLP as its legal counsel.

Sonnenschein Nath is expected to:

   a) provide legal advice with respect to the Debtor's rights and
      duties as a debtor-in-possession in the continued operation
      of its business;

   b) assist, advise and represent the Debtor in analyzing its
      capital structure, investigating the extent and validity of
      liens, cash collateral stipulations or contested matters;

   c) assist, advise and represent the Debtor in potential
      postpetition financing transactions;

   d) assist, advise and represent the Debtor in the sale of
      assets, if applicable;

   e) assist, advise and represent the Debtor in the formulation
      of a disclosure statement and plan of reorganization and
      assist the Debtor in obtaining confirmation and
      consummation of a chapter 11 plan;

   f) assist, advise and represent the Debtor in any matter
      relevant to preserving and protecting the Debtor's estate;

   g) investigate and prosecute preferential or fraudulent
      transfers and any other actions arising under the Debtor's
      bankruptcy avoidance powers;

   h) prepare on behalf of the Debtor all necessary applications,
      motions, answers, orders, reports and other legal papers;

   i) appear in Court on behalf of the Debtor and in order to
      protect the interests of the Debtor before the Court;

   j) assist the Debtor in administrative matters;

   k) perform all other legal services for the Debtor that may be
      necessary and proper in this proceeding;

   l) assist, advise and represent the Debtor in any litigation
      matter; and

   m) provide other legal advice and services, as requested by the
      Debtor, from time to time.

A. Steven Ledger, Esq., a Sonnenschein Nath member, discloses that
the firm's professionals bill:

      Professional                Designation       Hourly Rate
      ------------                -----------       -----------
      Wayne Hannah, Esq.          Partner              $600
      Robert Richards, Esq.       Partner              $490
      Jo Christine Reed, Esq.     Associate            $460
      Charles Duffield, Esq.      Associate            $415
      Jillian Gutman Mann, Esq.   Associate            $260
      Diane Bird                  Paralegal            $195

Mr. Ledger assures the Court that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.

Headquartered in Elmhurst, Illinois, Rotec Industries, Inc. --
http://www.rotec-usa.com/-- is an industry leader in concrete   
products and concrete placing technology & solutions.  The company
filed for chapter 11 protection on May 31, 2006 (Bankr. D. Del.
Case No. 06-10542).  Edward J. Kosmowski, Esq., at Young, Conaway,
Stargatt & Taylor, LLP, represents the Debtor in its restructuring
efforts.  When the Debtor filed for protection from its creditors,
it estimated assets and debts between $10 million and $50 million.


ROTEC INDUSTRIES: Committee Wants Landis Rath as Counsel
--------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Rotec
Industries, Inc.'s chapter 11 case, asks the U.S. Bankruptcy Court
for the District of Delaware for permission to employ Landis Rath
& Cobb LLP as its legal counsel.

Landis Rath will:

   a) render legal advice with respect to the Committee's powers
      and duties and other participants in the Debtor's case;

   b) assist the Committee in its investigation of the acts,
      conduct, assets, liabilities and financial condition of the
      Debtor, the operation of its business and any other matter
      relevant to the Debtor's case, as and to the extent any
      matters may affect the Debtor's creditors;

   c) participate in negotiations with parties-in-interest with
      respect to any disposition of the Debtor's assets, plan of
      reorganization and disclosure statement in connection with
      any plan and otherwise protect and promote interests of the
      Debtor's creditors;

   d) prepare all necessary applications, motions, answers,
      orders, reports and papers on behalf of the Committee, and
      appear on behalf of the Committee at Court hearings as
      necessary and appropriate in connection with the Debtor's
      case;

   e) render legal advice and perform legal services; and

   f) perform all other necessary legal services in connection
      with the Debtor's case, as may be requested by the
      Committee.

Adam G. Landis, Esq., a Landis Rath partner, and his associate,
Megan N. Harper will be the primary attorneys representing the
Committee.  Mr. Landis discloses that he will be paid $480 per
hour for his services.  Ms. Harper will charge the Debtor $260 per
hour for her work.

Mr. Landis assures the Court that his firm does not hold any
interest adverse to Committee or the Debtors' creditors.

Headquartered in Elmhurst, Illinois, Rotec Industries, Inc. --
http://www.rotec-usa.com/-- is an industry leader in concrete   
products and concrete placing technology & solutions.  The company
filed for chapter 11 protection on May 31, 2006 (Bankr. D. Del.
Case No. 06-10542).  Edward J. Kosmowski, Esq., at Young, Conaway,
Stargatt & Taylor, LLP, represents the Debtor in its restructuring
efforts.  When the Debtor filed for protection from its creditors,
it estimated assets and debts between $10 million and $50 million.


SAN PASQUAL: $114MM Casino Expansion Cues Moody's to Hold Ratings
-----------------------------------------------------------------
Moody's Investors Service affirmed San Pasqual Casino Development
Group, Inc.'s B2 corporate family rating and B2 senior unsecured
note rating.  San Pasqual owns and operates the Valley View Casino
near San Diego, California.  The ratings outlook is stable.

The affirmation considers that operating results are currently
exceeding expectations and that San Pasqual's $114 million casino
expansion, about $27 million of which has already been spent,
maintains its good risk profile even though the scheduled
completion date has been pushed back slightly to sometime in the
third quarter of 2007 from its original completion date of summer
2007.  The affirmation also considers the favorable demographics
of Valley View's market area and good operating performance
despite limited amenities relative to its competitors.  Key credit
concerns include San Pasqual's small cash flow base, construction
and expansion risks, dependence on a single gaming market, peak
leverage of about 6 x during construction, and competition from
several local and regional casinos.

The stable ratings outlook anticipates continued positive cash
flow performance despite significant construction activity, and
that Valley View's expanded capacity will be absorbed given
current capacity constraints.  Currently, the casino is operating
at or near capacity during the weekends.  The stable outlook also
assumes that, although San Pasqual has the ability to incur
additional debt, it will not borrow a material amount of debt
beyond the $180 million senior notes.

Moody's previous rating action on San Pasqual occurred on
Sep. 14, 2005 with the initial assignment of a B2 rating to its
$180 million senior notes due 2013.  A B2 corporate family rating
and a stable ratings outlook were also assigned.

The San Pasqual Development Group, Inc., was formed under the
law of the San Pasqual Band of Mission Indians to oversee the
development, financing, construction, operation, and management of
the Valley View Casino located approximately 40 miles from San
Diego, California.  The casino opened in April 2001 and generated
revenues of about $110 million during the latest 12-month period
ended Mar. 31, 2006.


SAVERS INC: Moody's Junks Rating on $140MM Sr. Subordinated Notes
-----------------------------------------------------------------
Moody's Investors Service assigned first time ratings to Savers,
Inc.  The ratings are being assigned in connection with the
proposed leveraged recapitalization of Savers as a result of the
acquisition of the company by Freeman Spogli & Co. in partnership
with management and certain existing owners.

These ratings are assigned:

   * Corporate family rating at B2;
   * $25 million senior secured revolving credit facility at B1;
   * $187 million senior secured term loan at B1;
   * $140 million senior subordinated notes at Caa1.

Freeman Spogli and Co., in partnership with certain existing
owners and management, has executed a definitive agreement
to acquire Savers, Inc. for a total enterprise value of
$555 million.  The transaction will be financed with the proceeds
of the $187 million proposed term loan, $140 million proposed
senior subordinated notes, rollover equity from certain existing
owners and management, as well as a new equity contribution by
Freeman Spogli.

The B2 corporate family rating is primarily driven by the
company's weak credit metrics, debt heavy capital structure, small
scale, and private equity sponsor influenced financial policy,
which constrain the rating category despite certain aspects of its
business franchise that could support a higher rating category.  
Pro forma for the proposed transaction the company will be highly
levered with weak free cash flow generation.

Its credit metrics are primarily consistent with single B rated
company's, except its EBIT which is more indicative of a Ba
rated company.  The company has a history of leveraged
recapitalizations and debt financed dividends.  The most recent
recapitalization prior to the current transaction was the
acquisition of the company by Berkshire Partners in 2000 and
,under the previous financial sponsor, the most recent debt
financed dividend was in 2004.

The rating outlook is stable. Positive ratings pressure could
develop should the company sustain FCF Debt above 5% and should
Debt approach 6x.  Negative rating pressure could develop should
the company's liquidity deteriorate or operating performance
decline such that free cash flow turned negative
or EBIT fell below 1.25x.

The senior secured revolver and term loan, at B1, are rated one
notch above the corporate family rating reflecting their senior
position in the capital structure as well as their security
interest in all the assets of the company, including an inter
company secured note payable from the Canadian subsidiary, Value
Village.  The $187 million term loan will have two tranches, a $97
million U.S. Tranche and a $90 million Canadian Tranche.  The $25
million revolver and $97 million U.S. tranche will be secured by
all U.S. assets as well as the pledge of an inter company secured
note payable by Value Village, the Canadian subsidiary.

In addition, the $25 million revolver and $97 million U.S. tranche
will be guaranteed by all domestic subsidiaries.  The
$90 million Canadian Tranche will be secured by all Canadian
assets and guaranteed by the U.S subsidiaries and Savers, Inc.,
the parent company.  The senior subordinated notes are rated at
Caa1, two notches below the corporate family rating, reflecting
their subordinated position in the capital structure as well as
the fact that they are guaranteed by only the US subsidiaries, and
therefore are also structurally subordinated to the non debt
liabilities of the Canadian subsidiary.  While the senior
subordinated notes will be filed under 144(a), they will not have
registration rights, therefore, the company will not file with the
SEC going forward.

Savers, Inc., headquartered in Seattle, Washington, is the largest
for-profit thrift store chain in the world. Savers operates 207
stores in the United States, Canada stores, and Australia stores
under the nameplates, Savers, Value Village, and Village de
Valeurs.  Total revenues for the fiscal year ended December 31,
2005 were $479 million.


SCOTTISH RE: Expects to Report $130 Million Second Quarter Loss
---------------------------------------------------------------
Scottish Re Group Limited expects to report a net operating loss
available to ordinary shareholders of approximately $130 million
for the second quarter ended June 30, 2006.

The Company said the loss for the quarter is principally related
to a valuation allowance on deferred tax assets of approximately
$112 million combined with these factors:

     -- Reduction in estimated premium accruals

     -- Increased retrocession costs

     -- Write-down of deferred acquisition costs due to higher
        than expected lapse rates on certain fixed annuity
        treaties

     -- Severance and retirement costs and other non-recurring
        operating expenses.

The Company expects earnings for its third and fourth fiscal
quarters to be lower than the Company's previously announced
guidance.  The reduction in earnings guidance is due to lower than
expected new business volumes, higher than anticipated
retrocession costs and income tax expense due to the inability to
recognize future deferred tax benefits.

On July 28, 2006, the Board of Directors suspended the ordinary
share dividend.

Scottish Re will release earnings for the second quarter ended
June 30, 2006 on Thursday, August 3, 2006, after 4:00 p.m., New
York time.

                      About Scottish Re

Scottish Re Group Limited -- http://www.scottishre.com/-- is a  
global life reinsurance specialist.  Scottish Re has operating
companies in Bermuda, Charlotte, North Carolina, Dublin, Ireland,
Grand Cayman, and Windsor, England.  At March 31, 2006, the
reinsurer's balance sheet showed $12.2 billion assets and $10.8
billion in liabilities.  On July 31, 2006, Fitch Ratings cut
Scottish Re's issuer default rating to BBB from A-, and lowered
its insurer financial strength rating one notch to A-.  Fitch
rates the reinsurer's hybrid and preferred securities at BB+.  


SCOTTISH RE: Hires Goldman Sachs & Bear Stearns for Advice
----------------------------------------------------------
Scottish Re Group Limited disclosed this week that it has hired
Goldman Sachs and Bear Stearns to "assist with evaluating
strategic alternatives and potential sources of capital."  

The announcement came as the global life reinsurance company
disclosed a projected $130 million second quarter loss and the
resignation of its President and CEO.  

In June, Jeffrey P. Hughes joined Scottish Re's Board of
Directors.  Mr. Hughes was elected to the Board at a meeting held
on June 22, 2006, following the resignation of William Spiegel.  
Mr. Hughes is Vice Chairman and a founding partner of The Cypress
Group, a New York based private equity firm and also the Company's
largest shareholder.  Mr. Hughes, Scottish Re commented at the
time, has a lengthy record of business accomplishments and many
years of board experience across a range of industries.

                      About Scottish Re

Scottish Re Group Limited -- http://www.scottishre.com/-- is a  
global life reinsurance specialist.
Scottish Re has operating companies in Bermuda, Charlotte, North
Carolina, Dublin, Ireland, Grand Cayman, and Windsor, England.  At
March 31, 2006, the reinsurer's balance sheet showed $12.2 billion
assets and $10.8 billion in liabilities.  On July 31, 2006, Fitch
Ratings cut Scottish Re's issuer default rating to BBB from A-,
and lowered its insurer financial strength rating one notch to A-.  
Fitch rates the reinsurer's hybrid and preferred securities at
BB+.  


SCOTTISH RE: Scott E. Willkomm Resigns as President & CEO
---------------------------------------------------------
Scott E. Willkomm has resigned his position as President and Chief
Executive Officer for global life reinsurance specialist Scottish
Re Group Limited.

The Board of Directors appointed Paul Goldean, Executive Vice
President and General Counsel, to the position of interim Chief
Executive Officer, effective immediately.

Glenn Schafer, Chairman of the Board of Directors, said the Board
has appointed a special committee, The Office of the Chairman, to
assist executive management in directing the company in the near
term.  The committee will include two longtime insurance industry
executives, Bill Caulfeild-Browne and Mr. Schafer, as well as Mr.
Goldean.

"I am looking forward to working with the Office of the Chairman
and tapping the long-term experience, knowledge and insights of
both Glenn and Bill," said Mr. Goldean.

Mr. Schafer retired as Vice Chairman of Pacific Life Insurance
Company at the end of 2005, having joined the company in 1986.
During his tenure, Mr. Schafer served as Chief Financial Officer
and President and added the Vice Chairman role for the last ten
months of his career at Pacific Life.

Mr. Caulfeild-Browne was the Chief Operating Officer (U.S.) for
Swiss Re Life and Health North America from 1996 to 1998.  He was
Chief Operating Officer and a director of The Mercantile and
General Life Reassurance Company, U.S., from 1990 to 1996.

Mr. Goldean joined the Company in February 2002 as its Senior Vice
President and General Counsel.  Prior to joining the Company, Mr.
Goldean worked at Jones, Day, Reavis & Pogue where, among other
things, he acted as outside counsel to the Company.

                       About Scottish Re

Scottish Re Group Limited -- http://www.scottishre.com/-- is a  
global life reinsurance specialist.  Scottish Re has operating
companies in Bermuda, Charlotte, North Carolina, Dublin, Ireland,
Grand Cayman, and Windsor, England.  At March 31, 2006, the
reinsurer's balance sheet showed $12.2 billion assets and $10.8
billion in liabilities.  On July 31, 2006, Fitch Ratings cut
Scottish Re's issuer default rating to BBB from A-, and lowered
its insurer financial strength rating one notch to A-.  Fitch
rates the reinsurer's hybrid and preferred securities at BB+.  


SCOTTISH RE: Fitch Downgrades Default Rating to BBB from A-
-----------------------------------------------------------
Fitch has downgraded Scottish Re's (NYSE:SCT) operating
subsidiaries as follows:

   -- Issuer Default Rating (IDR) to 'BBB' from 'A-';

   -- Insurer financial strength (IFS) to 'A-' from 'A'.

All ratings have been placed on Rating Watch Negative.

The rating action follows SCT's announcement that it expects to
report a loss for the three months ending June 30, 2006.  This
loss follows disappointing results in the first quarter of 2006
relative to management's plans.  Performance over the past
several years has been characterized as moderate compared to
Fitch's rating expectations, and has reflected the challenges
associated with rapid growth and successive acquisitions.

The rating action also reflects certain unfavorable liquidity
trends, including the need during the second quarter to raise
outside funding to inject additional capital into the U.S.
subsidiary after state regulators indicted a portion of the
capital benefits from a Regulation XXX life securitization made
in 2005, via special purpose entity Orkney Re, needed to be
reversed.  The company is also facing higher strain on its
business than anticipated. SCT may need to fund a cash put
option related to $115 million of senior convertible notes
later this year, but the company has indicated that it has more
than adequate availability between internal cash resources and
its existing credit facilities to fund this payment without and
effect on its operations..

Fitch expects to update its analysis and ratings following
discussions with management this week, and a review of the
final earnings announcement.  It is possible SCT's ratings could
be reduced further in the near-term following that review.

SCT is an insurance holding company with operations primarily
focused on global life and annuity reinsurance.  Total gross
face amount of reinsurance in force was $1.02 trillion at Dec.
31, 2005. Operations are conducted in subsidiaries located in
Bermuda, Charlotte, North Carolina, Dublin Ireland, Grand
Cayman and Windsor, England.

Fitch has downgraded the following ratings and placed them on
Rating Watch Negative:

   Scottish Annuity & Life Insurance Company (Cayman) Limited

      -- IFS to 'A-' from 'A'.

   Scottish Re (U.S.) Inc.

      -- IFS to 'A-' from 'A'.

   Scottish Re Limited

      -- IFS to 'A-' from 'A'.

   Scottish Re Group Limited

      -- IDR to 'BBB' from 'A-';

      -- 4.5% USD115 million senior convertible notes to
         'BBB-' from 'BBB+';

      -- 5.875% USD 142 million hybrid capital units to
         'BB+' from 'BBB';

      -- 7.25% USD 125 million non-cumulative perpetual
         preferred stock to 'BB+' from 'BBB'.


SECUNDA INTERNATIONAL: Extends Tender Offer Expiration to Aug. 11
-----------------------------------------------------------------
Secunda International Limited reported that its pending tender
offer and consent solicitation for any and all of its $125 million
Senior Secured Floating Rate Notes due 2012 (CUSIP No. 81370FAB4)
pursuant to the Offer to Purchase and Consent Solicitation
Statement dated June 27, 2006 has been extended to 5:00 p.m., New
York City time, on Aug. 11, 2006.

The previously reported expiration time for the Tender Offer was
July 28, 2006, at 5:00 p.m., New York City time.

As previously reported, 100.0% of the Notes were tendered prior to
the Consent Time, which was 5:00 p.m., New York City time on July
12, 2006.  The "Tender Offer Yield" for the Tender Offer is
5.658%, which was determined by reference to a fixed spread of 50
basis points over the yield of the 2 3.8% U.S. Treasury Note due
August 31, 2006, calculated at 2:00 p.m., New York City time, on
July 14, 2006.  Assuming the actual settlement date is August 14,
2006, the total consideration would be $1,043.58 for each $1,000
principal amount of Senior Secured Notes that was validly tendered
and not withdrawn prior to 5:00 p.m., New York City time, on
July 12, 2006, including the consent payment of $30.00 per $1,000
principal amount of Senior Secured Notes.  Except for the
extension of the expiration date, all other terms and conditions
of the Tender Offer remain unchanged.

The Tender Offer is subject to the satisfaction of certain
conditions, including the receipt of tenders from holders of a
majority in principal amount of the outstanding Notes, entering
into a new credit facility or another financing vehicle that
provides the Company with sufficient cash to fund the Tender
Offer, the successful pricing, as determined in the Company's sole
discretion, of the initial public offering of the Company's common
shares in Canada, and satisfaction of customary conditions.

Additional information concerning the Tender Offer may be obtained
by contacting:
  
          Banc of America Securities LLC
          High Yield Special Products
          Collect: (212) 847-5836
          Toll Free: (888) 292-0070.

In the event that the Tender Offer is not consummated, the Company
says it will offer to registered holders of the Notes to purchase
for cash, Notes in an aggregate principal amount of up to
$3,800,000, on a pro rata basis and on the terms and subject to
the conditions set forth in an offer to purchase to be dated Aug.
1, 2006, copies of which may be obtained by contacting:

          D.F. King and Co., Inc.,
          Information Agent
          Collect: (212) 269-5550
          Toll Free: (800) 758-5378

Pursuant to the terms of the Indenture governing the Notes, on
August 1, 2006, the Company is required to make an offer to
purchase Notes in an aggregate principal amount of $3,800,000 at a
purchase price in cash equal to 100% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of
purchase.  The Annual Reduction Offer is currently scheduled to
expire at 5:00 p.m., New York City time on Aug. 29, 2006.  Subject
to the requirements of the Indenture, the Annual Reduction Offer
will be extended as necessary to permit Notes that are currently
tendered in the Tender Offer to be tendered in the Annual
Reduction Offer if the Tender Offer is not consummated.

Based in Nova Scotia, Canada, Secunda International Limited --
http://www.secunda.com/-- provides supply and support services to  
the offshore oil and gas industry internationally.  The Company
currently owns and operates a fleet of 14 harsh weather,
multifunctional marine vessels that provide supply, support and
safety services to offshore exploration, development, production
and subsea construction projects.  The Company primarily serves
the North Sea, West Africa and the Gulf of Mexico and have a
leading position in the east coast of Canada.

                        *     *     *

As reported in the Troubled Company Reporter on June 29, 2006,
Standard & Poor's Ratings Services held its 'B-' long-term
corporate credit and senior secured debt ratings on offshore
support vessel provider Secunda International Inc. on CreditWatch
with positive implications, where they were placed Sept. 29, 2005.


SERACARE LIFE: Wants to Walk Away from Five Unexpired Leases
------------------------------------------------------------
SeraCare Life Sciences, Inc., asks the U.S. Bankruptcy Court for
the Southern District of California to extend the period within
which they can assume, assume and assign, or reject unexpired
nonresidential real property leases to Oct. 18, 2006.

The Debtor operates its business from one facility it owns in West
Bridgewater, Massachusetts and seven separate facilities leased by
the Debtor and located in California, Massachusetts, Maryland and
Pennsylvania.

These real property leases are:

   Premise                  Lessor
   -------                  ------
   Cambridge Facility       99 Erie Street, LLC
   Frederick Facility       MIE Properties, Inc.
   Gaithersburg Facility    B.F. Saul Real Estate Investment Trust
   Milford Builing A        KHIP Associates
   Milford Builing C        NeoTech Development Company, L.L.C.
   Oceanside Facility       General Wood Investment Trust
   Hatboro Facility         Canalley Management

Paul J. Couchot, Esq., at Winthrop Couchot Professional
Corporation, contends that the Debtor will not assume the Hatboro
Facility lease, and will allow for it to be deemed rejected.  
According to the Debtor, Hatboro Facility is an asset that is not
necessary to the Debtor's reorganization.

Moreover, the Debtor has been engaged in ongoing negotiations with
General Wood for the Oceanside Facility to extend the term of that
lease, which expires on Aug. 31, 2006, Mr. Couchot relates.

Mr. Couchot says that the Debtor needs more time to decide on the
remaining real property leases and expects that the assumption or
rejection of those leases will be effected through the
confirmation of its Chapter 11 Plan.

Mr. Couchot argues that if the Debtor was required to now assume
the real property leases, the Debtor's obligations would become
postpetition obligations of the Debtor's estate, thus, permitting
the lessors to millions of dollars of unnecessary and large
administrative priority claims if any post-assumption default
under any of the remaining real property leases.

The Debtor believes that there is no prejudice to the lessors of
the remaining leases since the it is current in paying its pre and
postpetition obligations and will remain current in paying its
accruing obligations with respect to the remaining leases.  
Accordingly, the lessors under the remaining leases will suffer no
prejudice if the Court grants the Debtor's request, Mr. Couchot
adds.

Based in Oceanside, California, SeraCare Life Sciences, Inc. --
http://www.seracare.com/-- develops and manufactures biological  
based materials and services for diagnostic tests, commercial
bioproduction of therapeutic drugs, and medical research.  The
Company filed for chapter 11 protection on March 22, 2006
(Bankr. S.D. Calif. Case No. 06-00510).  The Official Committee of
Unsecured Creditors selected Henry C. Kevane, Esq., and Maxim B.
Litvak, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub
LLP, as its counsel.  When the Debtor filed for protection from
its creditors, it listed $119.2 million in assets and
$33.5 million in debts.


SILICON GRAPHICS: Court Approves Modified Employee Incentive Plan
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approves Silicon Graphics, Inc., and its debtor-affiliates'
Employee Incentive Plan, as modified, and authorizes them to pay
their obligations under their Other Bonus Programs.

The Debtors have modified their Employee Incentive Plan.

Specifically, the number of eligible employees in Group 1 is
increased from 23 to 27.  Accordingly, the pool of funds available
is increased to $1,362,909.  Each employee will receive a bonus of
29% of their annual base salary.

The number of eligible engineers in Group 3 is increased from
seven to nine.  Group 3's funds is decreased to $303,225.  Thus,
each engineer will receive a bonus of 25% of their annual salary.

Gary T. Holtzer, Esq., at Weil, Gotshal & Manges LLP, in New York,
relates that as a result of the modifications, $25,000 was made
available to increase the discretionary bonus pool from which
individual bonus payments will be awarded.  The Debtors have and
will continue to identify non-insider employees eligible to
receive bonus payments from the Discretionary Pool.

Mr. Holtzer says that if an employee selected to receive a bonus
payment under the EIP resigns or is terminated for cause prior to
payment of all or part of their bonus, the unpaid portions will be
forfeited and returned to the Discretionary Pool.

                Clarifications to Other Bonus Programs

A. Referral Program: After the Debtors filed for bankruptcy, they
    inadvertently paid four Referral Bonuses totaling $8,000 that
    were earned prepetition.  The Debtors seek retroactive
    approval of the payments.

B. Lead Program: As of the Petition Date, approximately $32,000
    in prepetition bonuses were owed to 100 employees in
    connection with the program.  The Debtors seek the Court's
    authority to pay all outstanding amounts under the program and
    to continue it in the ordinary course of business.

C. Special Incentive Program: As of the Petition Date, $4,500 in
    prepetition bonuses were owed to eight employees under the
    program which the Debtors inadvertently paid postpetition.
    The Debtors seek retroactive approval of the prepetition bonus
    payments under the program and authority to continue the
    program in the ordinary course of business.

D. Discretionary Bonus Program: The actual and correct amount of
    the bonus payment to a manager in the Debtors' engineering
    department is $15,000.

E. Retention Bonuses: The Debtors seek the Court's authority to
    pay five retention bonuses totaling $30,400.

F. Relocation Program: The Debtors learned that there are two
    employees awaiting reimbursement for their relocation
    expenses.  The Debtors seek the Court's authority to make
    payments and to continue to pay newly hired employees for
    their relocation expenses on a case-by-case basis.

G. Sign-On Bonus Program: The Debtors tell the Court that two
    employee candidates did not accept the offers of employment;
    thus, only three employees are awaiting payment of sign-on
    bonuses.

H. Benchmarking Bonuses: The Debtors disclosed that they
    committed to pay a team of six employees a group bonus
    totaling $12,000, or $2,000 per employee.

                      About Silicon Graphics

Headquartered in Mountain View, California, Silicon Graphics, Inc.
(OTC: SGID) -- http://www.sgi.com/-- offers high-performance  
computing.  SGI helps customers solve their computing challenges,
whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense, enabling the transition from
analog to digital broadcasting, or helping enterprises manage
large data.  The Debtor and 13 of its affiliates filed for chapter
11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977
through 06-10990).  Gary Holtzer, Esq., and Shai Y. Waisman, Esq.,
at Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed total assets of $369,416,815 and
total debts of $664,268,602.  (Silicon Graphics Bankruptcy News,
Issue No. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000)


SILICON GRAPHICS: Gets Final Nod to Use Cash Management System
--------------------------------------------------------------
The Hon. Allan L. Gropper of the U.S. Bankruptcy Court for the
Southern District of New York authorizes Silicon Graphics, Inc.,
and its debtor-affiliates to continue utilizing their current
integrated cash management system in a manner consistent with
their prepetition practices on an final basis.

As reported in the Troubled Company Reporter on May 17, 2006, the
Office of the United States Trustee has established certain
operating guidelines for debtors-in-possession to supervise the
administration of chapter 11 cases, including changes to the
debtor's cash management system.

A flow chart summarizing the Debtors' Cash Management System is
available for free at http://ResearchArchives.com/t/s?e97

Gary T. Holtzer, Esq., at Weil, Gotshal & Manges LLP, in New
York, informs the Court that the Debtors' Cash Management System
constitutes an ordinary course and essential business practice
providing significant benefits to the Debtors, including, the
ability to:

    -- control corporate funds;

    -- ensure the maximum availability of funds when and where
       necessary; and

    -- reduce administrative expenses by facilitating the movement
       of funds and the development of more timely and accurate
       account balance information.

Headquartered in Mountain View, California, Silicon Graphics, Inc.
(OTC: SGID) -- http://www.sgi.com/-- offers high-performance  
computing.  SGI helps customers solve their computing challenges,
whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense, enabling the transition from
analog to digital broadcasting, or helping enterprises manage
large data.  The Debtor and 13 of its affiliates filed for chapter
11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977
through 06-10990).  Gary Holtzer, Esq., and Shai Y. Waisman, Esq.,
at Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed total assets of $369,416,815 and
total debts of $664,268,602.  (Silicon Graphics Bankruptcy News,
Issue No. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000)


SKYEPHARMA PLC: PricewaterhouseCoopers Raise Going Concern Doubt
----------------------------------------------------------------
PricewaterhouseCoopers LLP in London, disclosed that there is
uncertainty as to when Skyepharma PLC's certain strategic
initiatives may be concluded and their effect on the Company's
working capital requirements.  PwC says that this raises
substantial doubt on the Company's ability to continue as a
going concern.  PwC disclosed this explanatory paragraph after
auditing the Company's financial statement for the year ended
Dec. 31, 2005.

The Company's management reported that its working capital
requirements continue to be affected by the timing and receipt of
milestone payments and payments received on the signing of new
contracts.  The Company's future cash flows will also be impacted
by the change in strategy, principally its stated aim of moving to
sustainable profitability in the near term and its refocus to
concentrate on oral and pulmonary products.

The Company relates that its near term working capital
requirements are uncertain and sensitive to the timing of a number
of initiatives required to provide the financial flexibility to
implement the new strategy.  These initiatives include the:

    * licensing of Flutiform(TM) in Europe,

    * divestment of the Company's injectable business interests,
      which is expected to require shareholder approval, or

    * U.S. licensing for DepoBupivacaine.

In 2005, SkyePharma reported a full year net loss of
GBP50.9 million compared to a 2004 full year net loss of
GBP18.6 million.  As a result of these losses, the Company's
consolidated net assets at Dec. 31, 2005 declined to GBP31.9
million, compared with GBP36.5 million at December 31, 2004.

A full-text copy of the Company's Annual Report is available for
free at http://ResearchArchives.com/t/s?e98

Headquartered in London, SkyePharma PLC (Nasdaq: SKYE; LSE: SKP)
-- http://www.skyepharma.com/-- develops pharmaceutical products  
benefiting from world-leading drug delivery technologies that
provide easier-to-use and more effective drug formulations.  There
are now twelve approved products incorporating SkyePharma's
technologies in the areas of oral, injectable, inhaled and topical
delivery, supported by advanced solubilisation capabilities.


SOLO CUP: Names Eric Simonsen as Interim Chief Financial Officer
----------------------------------------------------------------
The Board of Directors of Solo Cup Company appointed Eric A.
Simonsen interim chief financial officer of the company.  
While the company continues its search for a permanent CFO,
Mr. Simonsen will report directly to Robert Korzenski, president
and chief operating officer of the company and have responsibility
for the company's finance and accounting functions.

"Eric brings more than 35 years of financial experience and
leadership to the Solo team" said Mr. Korzenski.  "We believe his
hands on style and executive management experience will enhance
the company's financial position and global operations."

Mr. Simonsen is a managing director of AlixPartners, a financial
advisory firm specializing in performance improvement and
corporate restructuring.  Prior to joining AlixPartners in 2002,
Simonsen spent ten years at Allmerica Financial Corporation, a
Fortune 400 financial services company where he was CFO and chief
of operations.  His appointments while at AlixPartners have
included CFO, chief administrative officer, chief operating
officer and corporate controller.

Mr. Simonsen also owned and built The Lincoln Group, a
$225 million paper and cloth products manufacturing and
distribution company.  Additionally, he was a certified
public accountant and managing partner for Price Waterhouse.  
Mr. Simonsen holds a master's degree in business administration in
corporate finance and a bachelor's degree in accounting from
Lehigh University.

The company also announced the appointment of Norman W. Alpert
to its Board of Directors to replace John R. Woodard who resigned
his position to take on additional responsibilities at Vestar.   
Mr. Alpert was previously a director of the company from February
2004 until February 2006.
                          About Solo Cup

Headquartered in Highland Park, Illinois, Solo Cup Company --
http://www.solocup.com/-- manufactures disposable foodservice     
products for the consumer and retail, foodservice, packaging, and
international markets.  Solo Cup has broad expertise in plastic,
paper, and foam disposables and creates brand name products under
the Solo, Sweetheart, Fonda, and Hoffmaster names.  The Company
was established in 1936 and has a global presence with facilities
in Asia, Canada, Europe, Mexico, Panama and the United States.

                         *     *     *

As reported in the Troubled Company Reporter on Apr. 4, 2006,
Moody's Investors Service assigned ratings on Solo Cup Company's
$80 million senior secured second lien term loan due 2012 at B3;
$150 million senior secured revolving credit facility maturing
Feb. 27, 2010, at B2; $638 million senior secured term loan B due
Feb. 27, 2011, at B2; $325 million 8.5% senior subordinated notes
due Feb. 15, 2014, at Caa1; and Corporate Family Rating at B2.


SPHINX STRATEGY: Chapter 15 Petition Summary
--------------------------------------------
Petitioners/Joint
Official Liquidators: Kenneth Krys
                      Christopher Stride
                      Commerce House, 2nd Floor
                      Dr. Roy's Drive
                      P.O. Box 1370GT
                      Grand Cayman
                      Cayman Islands

Debtor: SPhinX Strategy Fund Ltd.
        Commerce House, 2nd Floor
        Dr. Roy's Drive
        P.O. Box 1370GT
        Grand Cayman
        Cayman Islands

Case No.: 06-11758

Debtor-affiliates filing separate chapter 11 petitions:

      Entity                                      Case No.
      ------                                      --------
      SPhinX Ltd.                                 06-11760
      SPhinX Macro Fund SPC                       06-11762
      SPhinX Macro, Ltd.                          06-11765
      SPhinX Managed Futures Fund SPC             06-11766
      SPhinX Long/Short Equity Fund SPC           06-11767
      SPhinX Convertible Arbitrage Fund SPC       06-11768
      SPhinX Fixed Income Arbitrage Fund SPC      06-11769
      SPhinX Distressed Fund SPC                  06-11770
      SPhinX Merger Arbitrage Fund SPC            06-11771
      SPhinX Special Situations Fund SPC          06-11772
      SPhinX Equity Market Neutral Fund SPC       06-11773
      SPhinX Plus SPC, Ltd.                       06-11774
      SPhinX Managed Futures, Ltd.                06-11775
      SPhinX Long/Short Equity Ltd.               06-11776
      SPhinX Convertible Arbitrage Ltd.           06-11778
      SPhinX Fixed Income Arbitrage Ltd.          06-11779
      SPhinX Distressed Ltd.                      06-11780
      SPhinX Merger Arbitrage, Ltd.               06-11781
      SPhinX Special Situations, Ltd.             06-11782
      SPhinX Equity Market Neutral Ltd.           06-11783
      PlusFunds Manager Access Fund, SPC Ltd.     06-11784

Type of Business: The foreign Debtors are a group of investment
                  vehicles designed to address a broad range of
                  investor needs.  The investment vehicles are
                  divided into three layers of funds: Feeder
                  Funds, Master Funds, and Portfolio Funds.  Each
                  vehicle has its own set of investment terms,
                  including investment objectives and redemptions.

                  Sphinx Strategy Fund Ltd. previously filed for
                  chapter 15 foreign proceeding on June 7, 2006
                  (Bankr. S.D.N.Y. Cas No. 06-11292).

Chapter 15 Petition Date: July 31, 2006

Court: Southern District of New York (Manhattan)

Judge: Robert D. Drain

Petitioners' Counsel: Madlyn Gleich Primoff, Esq.
                      Benjamin Mintz, Esq.
                      Kaye Scholer LLP
                      425 Park Avenue
                      New York, NY 10022
                      Tel: (212) 836-7042
                      Fax: (212) 836-7157

                           -- and --

                      Gary S. Lee, Esq.
                      Lovells
                      590 Madison Avenue
                      New York, NY 10022
                      Tel: (212) 909-0600
                      Fax: (212) 909-0660

Estimated Assets: More than $100 Million

Estimated Debts:  Unknown


STOCKERYALE INC: Incurs $974,000 Net Loss in Second Quarter
-----------------------------------------------------------
StockerYale, Inc., reported its financial results for the second
quarter ended June 30, 2006.  All 2005 and 2006 numbers have been
adjusted for discontinued operations.

For the three months ended June 30, 2006, the Company incurred a
$974,000 net loss compared to a $2.2 million net loss in 2005.

Revenues from continuing operations for the second quarter of 2006
were $4.6 million, representing a 13% comparable increase over the
second quarter of 2005.  Driving revenue growth was specialty
optical fiber, reflecting increased activity in the telecom and
defense sectors.  Specialty optical fiber revenue increased 73%
over the quarter ended June 30, 2005, and 31% over the quarter
ended March 31, 2006.  LED revenues increased 37% comparably and
37% sequentially due to the acceptance of the patented COBRA
illuminator in the machine vision industry.  Revenue from lasers
increased 6% from stronger OEM sales of laser products into the
machine vision and defense markets.

Gross profit increased 25% to a record $1.7 million in the second
quarter versus $1.4 million in the comparable quarter of 2005.  
Gross margin improved from 34% to 38% primarily attributable to
the increase in SOF sales, where the Company has greater operating
leverage.  Improved performance of laser operations after its lean
manufacturing initiative at the start of the second quarter also
contributed to the improvement. Gross profit was negatively
impacted by the decline in the value of the U.S. dollar versus the
Canadian dollar.  Before foreign currency exchange effect, gross
profit increased 32% and gross margin was 40% of revenue.

The operating loss for the second quarter was $700,000 versus
$900,000 in 2005, excluding stock-based compensation expense of
$100,000 and asset impairment charges in 2005 of $600,000 a 17%
improvement.  Research and development expenses of $700,000, were
3% lower than the second quarter of 2005.  Selling expenses
increased 24% to $600,000 due to increased marketing and sales
activities in the U.S. and Europe and FX impact in Canada.  
General and administrative expense rose 16% due to the expensing
of stock based compensation resulting from the Company's adoption
of FAS123R and consulting expenses related to Kaizen
implementation in Montreal.

EBITDA loss declined 35% to $198,000 in the second quarter 2006
compared to $305,000 in the same period in 2005 and $237,000 in
the previous quarter.

On June 28, 2006, the Company refinanced its Canadian $2.5 million
revolving credit line facility with a new three-year $4.0 million
revolving line of credit.  "The new revolver will give the Company
greater flexibility and better support for our operations
improvement initiatives," said Marianne Molleur, Chief Financial
Officer.  "The Company will evaluate ways to limit its remaining
FX exposure, beyond the use of forward contracts to limit losses
on payment transactions in Canada,"  added Ms. Molleur.

"Our margin growth demonstrated both the positive operating
leverage of the Company's specialty fiber business, as well as the
increased demand from the telecom sector, which helped us surpass
our goals for the first half of the year," said Mark W. Blodgett,
President and Chief Executive Officer.  "The Company continues to
see a positive impact from its operational improvement initiatives
as evidenced by the significant reduction in operating and EBITDA
loss this year.  Without the FX impact the Company would have
achieved an EBITDA positive milestone this quarter," added Mr.
Blodgett.

Second Quarter Highlights:

   -- Revenues increased 13% to $4.6 million due to strong
      performance in specialty optical fiber and LEDs.

   -- Gross profit increased 25% to a record $1.7 million versus
      $1.4 million.  Gross margins improved to 38% from 34%.

   -- Operating expenses increased 12% including $100,000 related
      to foreign currency exchange rates.  Selling expense rose by
      $120,000; general and administrative expense rose 16%
      largely due to the expensing of stock based compensation
      resulting from the Company's adoption of FAS123R.  Research
      and development expenditures represented 15% of revenues.

   -- Operating loss declined 9% to $800,000 from the comparable
      quarter, excluding asset impairment charges, due to higher
      revenue and higher margin rates, offset partially by higher
      operating expenses.

   -- EBITDA loss was reduced 35% to $198,000 versus $305,000 loss
      reported in the comparable quarter of the prior year.

                       Going Concern Doubt

Vitale, Caturano & Company, Ltd., expressed substantial doubt
about StockerYale's ability to continue as a going concern after
it audited the Company's financial statements for the years ended
Dec. 31, 2005 and 2004.  The auditing firm pointed to the
Company's recurring losses from operations, accumulated deficit
and significant financial obligations.

                         About StockerYale

Headquartered in Salem, New Hampshire, StockerYale, Inc.
(NASDAQ: STKR) -- http://www.stockeryale.com/-- is an independent   
designer and manufacturer of structured light lasers, LED modules,
and specialty optical fibers for industry leading OEMs.  In
addition, the company manufactures fluorescent lighting products
and phase masks.  The Company serves a wide range of markets
including the machine vision, industrial inspection, defense,
telecommunication, sensors, and medical markets.  StockerYale has
offices and subsidiaries in the U.S., Canada, and Europe.


SUSSER HOLDINGS: Moody's Holds B2 Rating on $170 Mil. Sr. Notes
---------------------------------------------------------------
Moody's Investors Service affirmed all ratings of Susser Holdings,
LLC and revised the rating outlook to positive from stable.  
Revision of the rating outlook to positive is prompted by the
company's planned initial public equity offering, and the
meaningful improvements in the company's balance sheet that would
result from the company's stated intention to pay some of the
senior notes with a portion of the proceeds.  Based on Moody's
operating expectations and the current capital structure, Moody's
would remain comfortable with the currently assigned ratings if
the IPO did not take place as contemplated.

Ratings are affirmed:

   * $170 million 10-5/8% senior unsecured notes at B2,
   * Speculative grade liquidity rating at SGL-3, and the
   * Corporate family rating at B2.

Moody's does not rate the $50 million secured revolving credit
facility.

The positive outlook reflects that credit metrics would improve if
the proposed initial public offering were to be consummated within
the medium term, as well as the increased flexibility from being
able to access the public equity markets as a source of capital.  
The company intends to use a portion of the proceeds to pay down
$50 million of the senior note issue.

Weighting down the corporate family rating to B2 are weak credit
metrics for debt to EBITDA, interest coverage, and free cash flow
to debt, the company's aggressive financial policy in which the
company is the product of a recent leveraged buyout, the
geographic concentration of the company's retail and wholesale
operations, and the intensely competitive nature of the
convenience store industry.  The ratings also recognize certain
qualitative aspects of the company's franchise that have low
investment grade or high non-investment characteristics such as
the moderate cash flow seasonality and the company's important
market position in the Rio Grande Valley of Texas.

The positive rating outlook reflects that ratings could be
upgraded following the pending initial public offering due to
meaningful improvements in the company's financial profile.   
However, the timing of the IPO is uncertain.  If the use of IPO
proceeds was different than currently expected or if the IPO did
not take place, then the rating outlook likely would revert to
stable.  The ratings and outlook are not based on the expectation
that high gasoline profitability during the latter half of 2005
will become the norm, or that the company will soon achieve a
higher rating with its current balance sheet.

Assuming that the IPO does not take place, over the longer term
ratings could eventually move upward if financial flexibility
sustainably strengthens such that EBIT coverage of interest
expense approaches 2x, leverage falls toward 5x, and Free Cash to
Debt rises to exceed 5%, if the system profitability expands from
new store development and growth in comparable merchandise sales,
and the company is able to maintain long-term gasoline
profitability even as non-traditional competitors open additional
fuel retailing locations.

Ratings could fall if credit metrics weaken such that leverage
rises above 6.5x or EBIT to interest expense falls below 1 time,
if free cash flow remains negative for reasons such as declines in
operating profitability or weak returns on capital investment, or
if non-traditional fuel retailers exert downward pricing pressure
on gasoline profitability.

Susser Holdings LLC, with headquarters of its operating subsidiary
in Corpus Christi, Texas, operates 319 convenience stores in Texas
and Oklahoma.  The company also wholesales fuel to 345 independent
retailers.  Revenue for the twelve months ending April 2, 2006 was
about $2 billion.


TEREX CORP: Earns $119.2 Million in 2006 Second Quarter
-------------------------------------------------------
Terex Corporation disclosed net income for the second quarter of
2006 of $119.2 million compared to net income of $71.2 million for
the second quarter of 2005.  

Net income for the second quarter of 2006 included a $3.6 million
net charge related to the early extinguishment of $100 million of
the Company's 10-3/8% senior subordinated notes.  

Net sales reached $2,080.6 million in the second quarter of 2006,
an increase of 18.3% from $1,759.1 million in the second quarter
of 2005.  Net debt decreased in the first half of 2006 by
$40 million from Dec. 31, 2005, levels, reflecting strong cash
from operations performance, partially offset by the acquisition
of a 50% controlling interest in a Chinese crane manufacturer in
the quarter, the call premium on the early extinguishment of debt,
and period capital expenditures.

"We are very pleased with this record setting quarter for Terex,
but we remain hard at work looking for continued improvement in
all of our businesses," Ronald M. DeFeo, Terex's chairman and
chief executive officer, commented.

"While this quarter marks a record level of revenue and net
income, it best highlights the potential of our team members and
products.  Lean manufacturing principles continue to be
implemented across the organization, purchasing and pricing
disciplines continue to improve, and customer service and support
continues to enhance our customers' experience with Terex."

"Our improvement in earnings was broad based, both in terms of
product and geography.  While our Terex Aerial Work Platforms
segment clearly had a superb quarter, we also saw dramatic
improvements in most of our businesses.  However, we also have
several businesses that are underperforming, including some of our
construction product lines.  For these businesses, we expect
improvements in their near term contribution to Terex.  
Geographically, we have seen strength in demand outside of North
America, with sales of certain products in Europe, Australia and
Asia accelerating and contributing significantly to our continued
backlog growth," Mr. DeFeo added.

"This fact, along with the recovery in North American non-
residential spending, drives a very optimistic view of our end
markets.  Commodity prices are expected to remain relatively high
-- driving demand for our equipment.  Large infrastructure
projects continue to be undertaken around the world -- driving
demand for our equipment.  The energy businesses, both electrical
and petro-chemical, continue to rebuild and improve their
infrastructure -- driving demand for our equipment.  Consequently,
we expect strong demand for at least a few more years."

"For the second quarter, we experienced a 3.5 percentage point
improvement, excluding special items, in our gross margin over the
prior year, driven by a combination of better manufacturing
leverage and pricing initiatives in excess of cost pressures.  
Consistent with the first quarter, improvements in gross profit
translated to a strong increase in overall operating
profitability, with operating margin posting a 2.2 percentage
point increase over the comparable 2005 quarter, again excluding
special items.  This represents an incremental operating margin of
23% excluding special items, and results in a Return on Invested
Capital of over 29% for the 12 months ended June 30, 2006.
Clearly, this quarter's results illustrate that we have taken
another major step towards our longer term goals of achieving a
10% operating margin for the full year, as well as delivering ROIC
in excess of 30% during strong economic times."

"We are raising our outlook for 2006 from our previous guidance
provided in May.  We now expect sales to be up 17% to 22% from our
2005 results to a range of $7.5 to $7.8 billion.  We are raising
our earnings per share expectations for the year to $3.55 to $3.75
from our previous indication of $3.20 to $3.40 per share,
excluding costs related to the early extinguishment of the
Company's 10-3/8% senior subordinated notes.  The increase in
profit expectations reflects continued favorable economic
conditions and the internal progress we are making on improving
costs, market development, and price realization," Mr. DeFeo
continued.

All financial results reflect the impact of Terex's 2-for-1 stock
split that occurred during July 2006.

Backlog figures as of June 30, 2005, have been adjusted from prior
available information to reflect an increase in backlog in the
Terex Construction segment that existed at that time.

                       Segment Performance

Commencing with the first quarter of 2006, Terex has realigned
certain operations in an effort to strengthen its ability to
service customers and to recognize certain organizational
efficiencies.

The mobile crushing and screening group, formerly part of the
Terex Construction segment, is now consolidated with the Terex
Materials Processing & Mining segment.  The European telehandler
business, formerly part of the Terex Construction segment, is now
part of the Terex Aerial Work Platforms segment.

The comparative segment performance data reflects this current
organization, and prior period amounts have been reclassified to
conform with this presentation.  

Net sales for the Terex Aerial Work Platforms segment for the
second quarter of 2006 increased $187.1 million to $579.6 million
from $392.5 million in the second quarter of 2005.  The increase
in net sales was driven by continued strong order activity from
the rental channel, including demand for the Company's telehandler
product line.  Gross margin for the quarter was 25.5%, compared to
19.0% for the quarter ended June 30, 2005, and was favorably
impacted by pricing actions and volume leverage on manufacturing
costs, although partially offset by continued cost pressures.
Income from operations increased to $110.1 million, or 19.0% of
sales, in the second quarter of 2006, from $51.7 million, or 13.2%
of sales, in the second quarter of 2005.

"The second quarter results were simply outstanding," said Bob
Wilkerson, President-Terex Aerial Work Platforms.

"Our sales were up almost 50% for the second quarter in a row, and
our backlog was up approximately 25% when compared to the second
quarter of 2005.  Our business continues to become more global
than in the past, with approximately one-third of our revenue now
coming from international markets, such as Europe and Australia.  
In addition to the excellent financial performance of our aerial
product lines, our telehandler product line posted another strong
quarter of growth and profitability.  We will continue to invest
resources to improve our light construction and trailer businesses
in an effort to strengthen their contribution to this segment's
results.

"While we remain cautious about various dynamics that can weigh
negatively on our business, the overall strength of the
international market and the fact that most of our business is
tied to non-residential construction reinforces our confidence
about prospects for the upcoming few years.  This quarter's
results demonstrate our ability to perform and meet current
demand, and we are prepared to meet the growing global demand for
our products," Mr. Wilkerson continued.

Net sales in the Terex Construction segment for the second quarter
of 2006 decreased $21.1 million to $428.9 million from
$450.0 million in the second quarter of 2005.  The decrease is
mainly due to the scrap handler product line and production ramp-
up delays regarding the next generation of certain construction
product lines scheduled during the second quarter.  Gross margin
for the second quarter of 2006 remained relatively flat at 13.5%
versus the prior year's results.  

Selling, general and administrative expenses for the second
quarter of 2006 were $41.5 million, or 9.7% of sales, compared to
$32.1 million, or 7.1% of sales, in the second quarter of 2005,
with the increase being mainly due to increased engineering costs
associated with new product development, certain period
restructuring activities, costs associated with developing the
Chinese market, the negative translation impact of currency, as
well as increased bad debt expense versus the prior year.  Income
from operations for the quarter was $16.6 million, or 3.9% of
sales, compared to $29.0 million, or 6.4% of sales, for the second
quarter of 2005.

"While the second quarter performance was a step forward from our
previous quarter's results, Terex Construction remains short of
its potential, and we are working tirelessly to implement
solutions to the issues that confront us," Fergus Baillie, acting
president of Terex Construction, commented.

"We previously disclosed an extensive product line upgrade for a
number of core products, but supplier constraints, as well as a
few internal start-up issues, limited the effectiveness of new
product launches on the quarter's results.  Furthermore, our scrap
handling product results, while improving from the pullback that
took place in the past few quarters, still reflects a more
aggressive competitive situation, negatively impacting our
operating margins versus year ago levels."

"Looking forward from here, we continue to focus on the few areas
we believe will contribute meaningfully toward improving results
for the remainder of 2006.  Our operating team is hard at work
tackling the challenges facing our German-built excavator product,
working with suppliers to ensure a more timely delivery schedule
of components, and we are confident that recent reorganization
activities will benefit this business during the balance of the
year.  Lastly, we are accelerating our plans to bring components
for our key excavator and loader backhoe products from our own
factories in China and India, and look for this to be additive to
the other margin enhancement programs already underway," Mr.
Baillie continued.

Net sales in the Terex Cranes segment for the second quarter of
2006 increased $104.4 million to $440.6 million from
$336.2 million in the second quarter of 2005, reflecting
improvement in all businesses, and particularly year over year
improvement in Terex's international mobile and crawler crane
businesses.  The Chinese crane acquisition accounted for
approximately 10% of the growth in net sales in the second
quarter.  Selling, general and administrative expenses increased
in the second quarter of 2006, mainly due to higher sales levels,
to $33.8 million, or 7.7% of sales, which is lower as a percentage
of sales when compared to the second quarter of 2005 rate of 8.7%
on $29.1 million of SG&A expenses Income from operations increased
$20.5 million to $36.9 million, or 8.4% of sales, for the second
quarter of 2006, from $16.4 million, or 4.9% of sales, for the
second quarter of 2005.

"The Terex Cranes segment had an excellent quarter, with strong
revenue growth of over 30% versus the prior year's results," Steve
Filipov, president of Terex Cranes, commented.

"The performance improvement was in revenue and, more importantly,
in operating profit, where we improved approximately 125% over the
prior year's results, which is a tremendous accomplishment.  Best
of all, the positive performance was broad based, with all product
lines contributing significantly to this quarter's improvements.
Also, during this quarter Terex completed the acquisition of a 50%
controlling interest in Sichuan Changjiang Engineering Crane Co,
Ltd., a Chinese crane manufacturer.  This positions Terex to more
actively participate in the domestic Chinese crane market, a
market that comprises a substantial portion of the global growth
in equipment sales.

"It would be easy to step back and enjoy our recent successes;
however, the crane market has only recently begun to recover in
terms of new equipment demand, and there still exists a supply and
demand imbalance in many product ranges.  We are working to
improve our production rates by improving our supplier base to
ensure that our products are the timely, reliable and cost-
effective equipment our customers expect.  There are stories
published every day regarding the massive infrastructure expansion
being undertaken globally that will require cranes, among other
pieces of equipment.  This demand, from China to the Middle East,
as well as Europe and a newly recovered North America, is unlikely
to soften in the near future, and adds to our confidence that
Terex Cranes can achieve a 10% operating margin in the foreseeable
future," Mr. Filipov continued.

Net sales for the Terex Materials Processing & Mining segment for
the second quarter of 2006 increased $47.8 million to
$406.1 million from $358.3 million in the second quarter of 2005.
The increase in net sales was attributable to the overall strong
demand for mining products, mainly the mining hydraulic excavators
manufactured in Dortmund, Germany, and the continued growth of the
mobile crushing and screening product lines.  This increased sales
volume had a positive impact, as income from operations increased
to $49.1 million, or 12.1% of sales, in the second quarter of
2006, from $35.8 million, or 10.0% of sales, in the second quarter
of 2005.

"The Terex Materials Processing & Mining segment had an excellent
quarter, and this positive performance came from all products and
businesses," Rick Nichols, president of Terex Materials Processing
& Mining, commented.

"For our mining products, new equipment demand continues to drive
our increased revenue, and we continue to grow our fleet
population.  Long term, this will drive the performance of our
parts business, which will be instrumental in delivering strong
incremental margin in the years to come."

"The hydraulic shovel, mining truck and drilling businesses
continued to perform favorably in this strong demand market.  Our
Materials Processing businesses had an outstanding quarter, driven
by increased demand for mobile commercial grade crushing and
screening equipment, as well as increased activity by our quarry
customers, which reflects the positive impact of increased
infrastructure spending.  Overall, we continue to believe that the
requirements for energy and growth in emerging markets,
underpinned by solid commodity prices, are at a level where we
should expect solid demand for our machine sales for the
foreseeable future.  As we stated last quarter, we are quite
positive on the outlook for our business, and our industry, for
the next several years," Mr. Nichols continued.

Net sales for the Terex Roadbuilding, Utility Products and Other
segment for the second quarter of 2006 increased slightly from the
prior year's results to $255.2 million, with meaningful growth in
the core product categories of Roadbuilding and Utility Products.
Gross margin for the quarter was 17.5%, a meaningful increase when
compared with prior year results of 13.3%, and was favorably
impacted by pricing actions and volume leverage on manufacturing
costs.  SG&A expense for the second quarter of 2006 was
$27.1 million, or 10.6% of sales, compared with $23.0 million, or
9.2% of sales, in the second quarter of 2005, reflecting the
consolidation of a distribution joint venture, increased selling
expenses related to the Brazilian Roadbuilding operation resulting
from strong year over year net sales improvement, as well as
increased spending in support of Terex Business System and lean
manufacturing initiatives.  Income from operations increased to
$17.6 million, or 6.9% of sales, from $10.3 million, or 4.1% of
sales, in the second quarter of 2005.

"The Terex Roadbuilding, Utility Products and Other group had a
much improved second quarter," Chris Ragot, president of Terex
Roadbuilding and Utility Products, commented.

"Our core Utility Products and Roadbuilding businesses both posted
revenue growth in excess of 10%, and the Utility Products business
continued to demonstrate significantly improved profitability.  
The Utilities business clearly is experiencing increased bid
activity and a surging backlog versus a year ago, and our ability
to produce to the stronger demand is improving every day.  On the
Roadbuilding front, our operations have aggressively adopted lean
manufacturing principles, and we are well prepared to participate
in a strengthening Roadbuilding end-market.  Specifically, our
concrete and asphalt plant businesses have done an excellent job
in driving operational improvement in their businesses, and our
Brazilian operation has successfully started to develop a market
presence throughout all of South America."

"As we mentioned previously, we view the Tatra commercial and
military truck business as a non-core operation and have been
reviewing our alternatives with respect to this business.  At this
time, we have reached an agreement to sell Tatra to a group of
private equity investors, including both American and Czech
investors who are familiar with Tatra's operations and have long
term plans to build that business.  Consummation of that
transaction is subject to customary closing conditions, and the
Company currently anticipates that this transaction will close in
the third quarter of 2006," Mr. DeFeo added.

The Company's consolidated results throughout 2006 will show a
more significant amount of general and administrative costs not
reflected in the total segment detail.  The unallocated expense is
primarily attributable to certain equity and long term
compensation programs, as well as certain unallocated expenses
related to Terex's global enterprise system implementation.  A
significant portion of the unallocated SG&A expense incurred
during 2006 is not expected to reoccur during 2007.

                    Capital Structure and Taxes

"Net debt at the end of the second quarter of 2006 decreased
$40 million to $530 million, down from $570 million at the end of
2005," Phil Widman, senior vice president and chief financial
officer, commented.

"Our cash performance was very strong, considering that the net
debt position reflects the use of cash for our Chinese crane
acquisition in April, as well as investment in working capital to
achieve our volume growth.  Most importantly, our Company took two
major steps towards a much more efficient and cost effective
capital structure.  At the end of June 2006, we redeemed $100
million principal amount of our 10-3/8% senior subordinated notes,
and subsequent to the second quarter close, we initiated the
process to retire the remaining $200 million principal amount of
these notes by mid-August 2006.  We also closed a new, larger
senior credit facility in July 2006, allowing us to reduce the
level of cash with which we have historically operated and to
instead utilize a lower cost revolver to meet our funding needs
for working capital movements."

"Net debt was $204 million lower when compared with the same
period last year, reflecting the strong cash flow of the past 12
months, despite our rapid increase in revenue.  We remain
optimistic about our cash generation prospects for 2006.  Working
capital as a percent of trailing three month annualized sales was
approximately 17.5% at the end of the second quarter of 2006, a
slight increase when compared to approximately 17.0% at the end of
the second quarter in 2005.  While we are making progress,
inventory levels are still too high, and with our continued focus
on world-class practices, we can provide an improved cash
generation profile going forward.  This quarter's performance has
led the Company to a ratio of net debt to total capitalization of
approximately 26% at the end of the second quarter of 2006,
meaningful progress when compared to the approximate 40% result
achieved at June 30, 2005." Mr. Widman continued.

"The effective tax rate for the second quarter of 2006 was 35.3%,
compared to 37.5% in the prior year's second quarter," Mr. Widman
commented on the effective tax rate.

Headquartered in Westport, Conn., Terex Corporation (NYSE: TEX) --
http://www.terex.com/-- is a diversified global manufacturer with  
2005 revenue of approximately $6.4 billion.  Terex operates in
five business segments: Terex Construction, Terex Cranes, Terex
Aerial Work Platforms, Terex Materials Processing & Mining, and
Terex Roadbuilding, Utility Products and Other.  Terex
manufactures a broad range of equipment for use in various
industries, including construction, infrastructure, quarrying,
surface mining, shipping, transportation, refining, and utility
industries.  Terex offers a complete line of financial products
and services to assist in the acquisition of Terex equipment
through Terex Financial Services.

                         *     *     *

As reported in the Troubled Company Reporter on June 27, 2006,
Standard & Poor's Ratings Services raised the ratings on
Terex Corp. including the corporate credit rating to 'BB' from
'BB-'.  In addition, ratings were removed from CreditWatch where
they were placed with positive implications on June 7, 2006.

At the same time Standard & Poor's assigned its 'BB' loan rating
to Terex's $900 million senior secured credit facilities due in
2013.  The rating agency also assigned a recovery rating of '2'
indicating its expectation of substantial recovery in the event of
a default.  The outlook is stable.

As reported in the Troubled Company Reporter on June 20, 2006,
Moody's Investors Service upgraded the ratings of Terex
Corporation's Corporate Family Rating to Ba3 from B2; senior
secured to Ba3 from B2; senior subordinate to B2 from Caa1; and,
speculative grade liquidity rating to SGL-2 from SGL-3.  Moody's
also assigned a Ba3 rating to the company's senior credit
facility.  The rating outlook is Stable.


TIME WARNER: Xspedius Acquisition Prompts S&P to Affirm B Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed the 'B' long-term
corporate credit and 'B-2' short-term credit ratings on Denver,
Colorado-based competitive local exchange carrier Time Warner
Telecom Inc.  The outlook is negative.

The affirmation follows the company's recent announcement of
its definitive agreement to acquire another CLEC, Xspedius
Communications LLC, for $531.5 million, including a cash component
of $212 million.  Pro forma for the acquisition, the company will
have about $1.3 billion in total debt outstanding.

"We see some strategic benefits from the acquisition," said
Standard & Poor's credit analyst Catherine Cosentino.

"However, given the small size of Xspedius relative to Time Warner
Telecom, the acquisition's operational benefits do not materially
assuage our fundamental concerns about the company's longer term
business prospects."

Owning Xspedius provides Time Warner Telecom with entry into
additional markets and some longer term competitive advantages,
including an improved ability to serve multilocation enterprise
customers.  Its markets will expand to about 75 from 44, including
the addition of Washington, Las Vegas, and Baltimore, Maryland,
and its on-net buildings will expand to 7,000 from around 6,000.

However, the ratings for Time Warner Telecom continue to reflect
the risks inherent in competing with larger, stronger incumbents
in an industry subject to increasing price competition.  The
company's business plan is also characterized by high capital
requirements that continue to defer its ability to generate
positive net free cash flows.  Time Warner Telecom is also highly
leveraged.


TRUMP ENT: Has Until August 8 to Object to N.J. Authority's Claims
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey approved
a stipulation between Trump Hotels & Casino Resorts, Inc., nka
Trump Entertainment Resorts, Inc., and New Jersey Sports and
Exposition Authority.

To permit the Debtors and the New Jersey Sports and Exposition
Authority to resolve the Debtors' objection to the NJSEA Disputed
Claims and to continue the settlement discussions with regards to
the Claims, the parties entered into a stipulation.

The parties agree that:

  (1) the Debtors have until Aug. 8, 2006, to file any formal
      objection to the NJSEA Disputed Claims;

  (2) the objection hearing as its relates only to the NJSEA
      Disputed Claims is continued to August 22, 2006, at 2:00
      p.m., to be held at the United States Bankruptcy Court,
      Mitchell H. Cohen U.S. Courthouse, Courtroom 4B, 400 Cooper
      Street, 4th Floor, Camden, New Jersey 08101; and

  (3) NJSEA has until Aug. 15, 2006, to file its response to
      the Debtors' objection.

As reported in the Troubled Company Reporter on Sept. 6, 2005, the
New Jersey Sports and Exposition Authority and Trump Plaza
Associates entered into an Easement Agreement in 1995, pursuant to
which an enclosed loggia was constructed across the front of the
East Hall of the historic Atlantic City Convention Center to
provide direct enclosed pedestrian access between the Trump Plaza
Casino and the World's Fair Casino.

In January 2000, Trump Plaza terminated the East Hall Loggia
Easement.  The NJSEA alleges that despite the termination, Trump
Plaza is still obligated to restore the easement area to its
original condition.

In January 2005, the NJSEA filed Claim No. 1452 against Trump
Plaza.  In June 2005, the NJSEA filed an amended claim -- Claim
No. 2263 -- asserting an administrative claim for $1,000,000.

Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino
Resorts, Inc., nka Trump Entertainment Resorts, Inc. --
http://www.thcrrecap.com/-- through its subsidiaries, owns and  
operates four properties and manages one property under the Trump
brand name.  The Company and its debtor-affiliates filed for
chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No.
04-46898 through 04-46925).  Robert A. Klymman, Esq., Mark A.
Broude, Esq., John W. Weiss, Esq., at Latham & Watkins, LLP, and
Charles Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N.
Stahl, Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano,
P.A., represent the Debtors in their successful chapter 11
restructuring.  When the Debtors filed for protection from their
creditors, they listed more than $500 million in total assets and
more than $1 billion in total debts.  The Court confirmed the
Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005,
and the plan took effect on May 20, 2005.  (Trump Hotels
Bankruptcy News, Issue No. 41; Bankruptcy Creditors' Service,
Inc., 215/945-7000).

                         *     *     *

As reported in the Troubled Company Reporter on Nov. 10, 2005,
Moody's Investors Service affirmed the ratings of Trump
Entertainment Resorts, Inc.'s $200 million senior secured revolver
due 2010 at B2; $150 million senior secured term loan due 2012 at
B2; $150 million senior secured delayed draw term loan due 2012 at
B2; $1.25 billion second lien senior secured notes due 2015 at
Caa1; Speculative grade liquidity rating at SGL-3; and Corporate
family rating at B3.  Moody's says the rating outlook is stable.


TRUMP ENT: Ct. OKs Pact Resolving IRS Claims Against Trump Indiana
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey approved
a stipulation among Trump Indiana, Inc., its debtor affiliates and
the United States Department of Treasury - Internal Revenue
Services in connection with the IRS' tax claims.

The IRS filed eight claims against Trump Indiana:

          Claim No.          Asserted Amount
          ---------          ---------------
            1448                $15,337,620
            1711                 15,337,620
            2218                 41,707,768
            2219                 41,707,768
            2228                 41,746,273
            2231                 41,746,273
            2251                 41,773,986
            2253                 41,773,986

The Debtors objected to Claim Nos. 1448, 1711, 2218, 2219, 2228,
2231 and 2253 asserting that they are duplicates of Claim
No. 2251.

The parties continue to engage in settlement discussions and
procedures to attempt to resolve the claims.

Pursuant to the stipulation, the parties agree that:

   (1) Claim Nos. 1711, 2218, 2219, 2228 and 2253 are all
       duplicates of Claim No. 2251, and are declared null, void
       and expunged in their entirety;

   (2) the Debtors will pay $3,353 to satisfy the IRS' claims
       against Trump Indiana for tax year ended Dec. 31, 1995,
       including all penalties or interest computed through
       July 15, 2006, subject to these terms:

         -- the 1995 payment will increase to $3,365 if paid
            after July 15, 2006, but on or before July 31; and

         -- in the event the 1995 payment is paid after July 31,
            the payment will be $3,365 plus additional interest
            computed on a per diem basis at the underpayment rate
            required by Section 6621 of the Internal Revenue
            Code;

   (3) the Debtors will pay $6,972,073 to satisfy the IRS' claims
       against Trump Indiana for tax year ended Dec. 31, 1996,
       including all penalties or interest computed through
       July 15, 2006, subject to these terms:

          * the $6,972,073 will increase to $7,002,698 if paid
            after July 15, 2006, but on or before July 31; and

          * in the event the 1996 payment is paid after July 31,
            the payment will be $7,002,698, plus additional
            interest computed on a per diem basis at the
            underpayment rate required by Section 6621;

   (4) the Debtors will pay $1,970,504 to satisfy the IRS' claims
       against Trump Indiana for the tax year ended December 31,
       1997, including all penalties or interest computed through
       July 15, 2006 subject to these terms:

         -- the $1,970,504 will increase to $1,979,159 if paid
            after July 15, 2006, but on or before July 31; and

         -- in the event the 1997 payment is paid after July 31,
            the payment will be $1,979,159 plus additional
            interest computed on a per diem basis at the
            underpayment rate required by Section 6621;

   (5) Trump Indiana will retain the right to file and seek any
       refund allowable for taxable years attributable to net
       operating loss carry-backs from subsequent taxable years;

   (6) the IRS will file an amended proof of claim that will not
       include any amounts alleged to be due and owing against
       Trump Indiana for the tax years ended 1995 through 1997;

   (7) upon the filing of the IRS amended proof of claim, Claim
       No. 2251 will be deemed null, void and expunged; and

   (8) the Debtors reserve the right to object to the IRS amended
       proof of claim or any amount alleged to be due and owing
       for a particular tax year pursuant to any attachment or
       exhibit to the amended proof of claim.

Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino
Resorts, Inc., nka Trump Entertainment Resorts, Inc. --
http://www.thcrrecap.com/-- through its subsidiaries, owns and  
operates four properties and manages one property under the Trump
brand name.  The Company and its debtor-affiliates filed for
chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No.
04-46898 through 04-46925).  Robert A. Klymman, Esq., Mark A.
Broude, Esq., John W. Weiss, Esq., at Latham & Watkins, LLP, and
Charles Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N.
Stahl, Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano,
P.A., represent the Debtors in their successful chapter 11
restructuring.  When the Debtors filed for protection from their
creditors, they listed more than $500 million in total assets and
more than $1 billion in total debts.  The Court confirmed the
Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005,
and the plan took effect on May 20, 2005.  (Trump Hotels
Bankruptcy News, Issue No. 41; Bankruptcy Creditors' Service,
Inc., 215/945-7000).

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 10, 2005,
Moody's Investors Service affirmed the ratings of Trump
Entertainment Resorts, Inc.'s $200 million senior secured revolver
due 2010 at B2; $150 million senior secured term loan due 2012 at
B2; $150 million senior secured delayed draw term loan due 2012 at
B2; $1.25 billion second lien senior secured notes due 2015 at
Caa1; Speculative grade liquidity rating at SGL-3; and Corporate
family rating at B3.  Moody's says the rating outlook is stable.


UNISYS CORP: Posts $193.6 Million Net Loss in Second Quarter
------------------------------------------------------------
Unisys Corporation reported its second-quarter 2006 financial
results and significant progress in its previously announced
cost-reduction efforts as part of its plan to reposition the
Company for long-term profitable growth.

For the three months ended June 30, 2006, the Company incurred
a net loss of $194.6 million compared with a net loss of
$27.1 million in 2005.  The results included a pre-tax charge of
$141.2 million to cover a planned workforce reduction of
approximately 1,900 people.  Pre-tax pension expense in the second
quarter of 2006 was $40.5 million compared with pre-tax pension
expense of $45.8 million in the year-ago quarter.

Revenue for the second quarter of 2006 declined 2% to $1.41
billion from $1.44 billion in the year-ago quarter.

"This was a mixed quarter for Unisys," said Joseph W. McGrath,
Unisys president and chief executive officer.  "We moved
aggressively in the quarter to implement planned headcount
reductions as part of our global cost-reduction program.
Based on a continuing analysis of the business and efforts to
reengineer processes, we also identified opportunities to reduce
our global headcount by an additional approximately 1,900 people.  
These reductions, along with those we announced in the first
quarter of 2006, bring the total number of planned worldwide
headcount reductions to approximately 5,500.  We expect these
reductions to yield net annualized cost savings of more than
$325 million by the second half of 2007."

"As we implemented these reductions and other elements of our
repositioning program, we saw short-term disruptions in our
operations, which impacted our financial results for the quarter,"
Mr. McGrath said.  "We remain confident, however, that the
repositioning effort will significantly enhance our profitability
and competitiveness over the long term."

Mr. McGrath said that of the total 5,500 planned workforce
reductions, the Company completed approximately 2,200 reductions
in the second quarter, and expects to complete another 1,300
reductions in the third quarter of 2006.  By the end of 2006,
Unisys expects to complete approximately 90% of the total planned
headcount reductions, with the remaining reductions targeted for
the first half of 2007.  The Company plans to reinvest some of
these cost savings into increased investments in its growth
initiatives, global sourcing, and employee development programs.  
Net of these reinvestments, the Company expects the headcount
actions to yield annualized cost savings in excess of $325 million
by the second half of 2007.

"We continue to see 2006 as a transitional year as we work through
our repositioning actions," Mr. McGrath said.  "As these
initiatives take hold, we expect to realize significant benefits
in our profitability in 2007 and 2008."

                  Second-Quarter Company Results

The Company reported a double-digit decline in overall orders in
the second quarter.  Services orders showed a double-digit
decrease, while Technology orders declined by a single-digit
percentage compared to the year-ago quarter.

Revenue in the U.S. declined 6% in the quarter to $628 million.  
Revenue in international markets increased 2% in the quarter to
$779 million.

              Second-Quarter Business Segment Results

Unisys has a long-standing policy to evaluate business segment
performance on operating income exclusive of restructuring charges
and unusual and non-recurring items.

Customer revenue in the Company's services segment declined 1% in
the second quarter of 2006 compared with the year-ago period.  The
company reported growth in infrastructure services and
outsourcing, which was offset by revenue declines in consulting
and systems integration and in core maintenance.

In late June, Unisys made major announcements regarding its
enterprise server family aimed at improving demand for these
products.  The Company announced a next-generation architecture
that will allow multiple operating systems and applications,
including proprietary ClearPath systems and Microsoft and Linux,
to run simultaneously on the same platform using Intel processor
technology.  Innovative Unisys software will enable these systems
to share application workloads dynamically based on business
requirements.  Unisys also announced new high-end ClearPath models
and software tools that provide up to a 40% performance increase
over previous models.

              Cash Flow and Balance Sheet Highlights

Unisys used $193 million of cash from operations in the current
quarter.  The cash usage in the quarter reflected a reduction of
approximately $73 million in the amount of receivables sold
through the company's securitization program.  The Company also
used $34 million of cash in the second quarter of 2006 for
restructuring payments.  In the second quarter of 2005, the
company generated $64 million of cash from operations, including a
tax refund of approximately $39 million.  The year-ago period
included $20 million of cash used for restructuring payments.  
Capital expenditures in the second quarter of 2006 were $65
million compared to $112 million in the year-ago quarter.  After
deducting for capital expenditures, Unisys used $258 million of
free cash in the quarter compared with usage of $48 million in the
second quarter of 2005.

During the second quarter Unisys repaid all of its outstanding
$57.9 million 8.125% notes due June 1, 2006.

The Company ended the second quarter of 2006 with $655 million of
cash on hand.

Headquartered in Blue Bell, Pennsylvania, Unisys Corporation
(NYSE: UIS) -- http://www.unisys.com/-- is a provider of IT  
services and technology hardware.  The company generated
$5.8 billion of revenue in 2004.

                         *     *     *

As reported in the Troubled Company Reporter on July 24, 2006,
Moody's Investors Service downgraded the senior unsecured and
corporate family debt ratings of Unisys Corporation to B2 from
Ba3.  The downgrade reflected a deterioration of credit metrics as
indicated by declining new business orders, widening operating
losses, and negative free cash flow through the company's Q2 2006
results reported July 19, 2006.  Moody's said the outlook is
negative.


XM SATELLITE: 2006 Second Quarter Net Loss Increases to $229 Mil.
-----------------------------------------------------------------
XM Satellite Radio Holdings Inc. disclosed financial and operating
results for the second quarter ended June 30, 2006, and it
recently surpassed seven million subscribers.

For the second quarter 2006, XM recorded gross subscriber
additions of 926,281 and net subscriber additions of 398,012.  XM
finished the second quarter 2006 with a total of 6,899,871
subscribers, representing a 56% increase over the 4,417,490
subscribers at the end of the second quarter 2005.

"Despite near-term challenges, XM's revenues grew in the second
quarter by 82% compared with the same quarter last year and we
were able to significantly bring down our adjusted EBITDA loss
year over year," Hugh Panero, CEO of XM Satellite Radio said.
"It's a testament to the appeal of satellite radio that XM
recently surpassed seven million subscribers."

                 Second Quarter Financial Results

For the second quarter 2006, XM reported revenue of approximately
$228 million, an increase of 82% from the $125 million reported in
the second quarter 2005.  The quarterly increase in revenue was
driven by 56% subscriber growth year over year, and increases in
average revenue per subscriber.  For the second quarter of 2006,
XM's subscriber acquisition cost (SAC), a component of cost per
gross addition (CPGA) was $64 compared with $50 in the second
quarter of 2005.  CPGA was $112 compared with $98 in the second
quarter of 2005.

XM's net loss for the second quarter of 2006 was $229 million
compared with a net loss of $147 million during the second quarter
of 2005.  The net loss for the second quarter of 2006 includes
$105 million in de-leveraging and other non-operating charges that
were not incurred during the second quarter of 2005.  For the
second quarter of 2006, the adjusted EBITDA loss improved to
$46 million versus an adjusted EBITDA loss of $88 million in the
second quarter of 2005.  The primary differences between net loss
and adjusted EBITDA are non-operating amounts and certain
operating non-cash charges.

At June 30, 2006, the Company's unaudited balance sheet showed
$185,938,000 in stockholders' deficit compared with $80,948,000 in
stockholders' equity at Dec. 31, 2005.

                  XM Revises Subscriber Guidance

Based on current marketplace dynamics and regulatory uncertainties
concerning 'plug-and-play' radios, XM also reported a change to
its subscriber guidance for 2006, projecting that it will end the
year with total subscribers of between 8.2 million and
7.7 million.

The company will refine this range at the end of the third quarter
when it expects to have a firmer sense of regulatory progress and
availability of product for the fourth quarter, as well as retail
sales trends.  With this revised subscriber guidance, XM still
expects to achieve positive cash flow from operations for the
fourth quarter 2006 and the full year 2007, although its ability
to do so becomes challenging toward the lower end of the
subscriber range.

             Nate Davis Appointed XM President and COO

Nate Davis was recently appointed to the newly created position of
president and chief operating officer at XM.  Mr. Davis, who
reports to Mr. Panero, is a seasoned telecommunications executive,
having served in senior management roles at XO Communications,
Nextel and MCI.  He continues to serve on XM's Board of Directors,
to which he was appointed in 1999.

                    XM Augments Marketing Team

The company has augmented its sales and marketing team with the
appointment of a number of senior-level marketing executives who
will report to a Chief Marketing Officer, to be named by Davis in
the coming months to oversee all sales and marketing for the
company.

                 "Oprah & Friends" Channel Offers
                Advance Preview of September Launch

In advance of its September 25th launch, the "Oprah & Friends"
channel is now broadcasting an on-air preview of programming and
personalities on its future home, XM Channel 156.  The much-
anticipated talk radio channel, exclusive to XM, will feature a
broad range of original programming hosted by popular
personalities from "The Oprah Winfrey Show" and O, The Oprah
Magazine.

               XM Creates Dedicated Automotive Group

XM recently created a dedicated automotive group to focus
exclusively on XM's automotive strategic partnerships.  XM veteran
Steve Cook, who was recently named to the role of executive vice
president of automotive, oversees the new group.  XM provides
satellite-delivered entertainment and data services for the
automobile market.  XM is available in more than 140 different
vehicle models for 2006.  2006 is also a staging year for
significant growth in the volume of XM-equipped vehicles in 2007
and 2008, with annual factory installations of XM radios expected
to double in the next two years.

                     About XM Satellite Radio

Headquartered in Washington, D.C., XM Satellite Radio Inc.
(Nasdaq: XMSR) -- http://www.xmradio.com/-- was incorporated in  
1992 and is a wholly owned subsidiary of XM Satellite Radio
Holdings Inc.  XM has broadcast facilities in New York and
Nashville, and additional offices in Boca Raton, Florida;
Southfield, Michigan; and Yokohama, Japan.  XM is available in
satellite-delivered entertainment and data services for the
automobile market through partnerships with General Motors, Honda,
Toyota, Hyundai, Nissan, Porsche, Suzuki, and Subaru.

                         *     *     *

XM Satellite Radio Holdings Inc.'s 1.75% Convertible Senior Noted
due 2009 carry Moody's Investors Service's Caa3 rating and
Standard & Poor's CCC- rating.


YUKOS OIL: Gazprom & Slovak Gov't. Eye 49% Stake in Transpetrol
---------------------------------------------------------------
OAO Gazprom and the Slovak government are both eyeing a 49% equity
stake in Slovakian pipeline firm Transpetrol from Yukos' Dutch
subsidiary Yukos Finance B.V. during talks in London, according to
published reports.

The Slovak government, which holds the remaining 51% in
Transpetrol, wants to re-acquire the stake it sold to Yukos in
2002 in order to reinforce its influence over the company, the
Economy Ministry told Interfax Thursday.

"The Slovak government is trying to reinforce its position in
Transpetrol and to buy a 49% stake back from Yukos," Slovak
Economy Minister spokesman Branislav Zvara said.

The Slovak government can veto until mid-2007 any effort of the
Russian company to sell its stake, CTK Czech News Agency relates.

Mr. Zvara said it is awaiting the outcome of today's bankruptcy
hearing that might determine what Yukos would do with its stake.

"At present, we cannot foresee the Yukos decision and we have not
been yet informed about its future plans with the stake.  The
Slovak government will decide whether it supports the Yukos plan
only after it knows the details," Mr. Zvara said.

                  Gazprom Hammers Out Offer

Meanwhile, Yukos' spokeswoman Claire Davidson confirmed to
Interfax that Gazprom is considering the purchase of the
Transpetrol stake for US$105 million.

Konstantin Chuichenko, the head of the Gazprom legal department,
told Ria Novosti that "joint work on the acquisition of a 49%
stake in Transpetrol is continuing."  

"Considering that this asset is under the ownership of Yukos
overseas subsidiaries," Mr. Chuichenko said, "the possibility of
concluding this deal, given that the court decides on the
company's liquidation Aug. 1, cannot be ruled out even after this
decision."

According to Mr. Chuichenko, a Yukos decision to sell its stake in
Transpetrol to Gazprom for US$105 million came after talks between
the two parties.

Yukos's creditors voted last week to liquidate the company
rejecting management plans to reorganize what was once Russia's
largest oil producer.

Russian daily Vedomosti says that Yukos has evaluated its stake in
Transpetrol at US$80 million to US$100 million, which Yukos
purchased in 2002 for US$74 million.

Yukos rejected Gazprom's bid last week to acquire Yukos's 20%
stake in Gazprom Neft (fka Sibneft).  As reported in TCR-Europe on
July 24, Gazprom has launched an offer to buy the stake at a price
lower than the US$13 billion Yukos paid for a 72% stake in Sibneft
from Millhouse Capital in October 2005.

                      About Transpetrol

Transpetrol operates the Slovak part of the Druzhba oil pipeline
through which about 10 million tons of Russian oil flow to western
Europe annually.

                        About Yukos

Headquartered in Moscow, Yukos Oil -- http://yukos.com/-- is an  
open joint stock company existing under the laws of the Russian
Federation.  Yukos is involved in energy industry substantially
through its ownership of its various subsidiaries, which own or
are otherwise entitled to enjoy certain rights to oil and gas
production, refining and marketing assets.

The Company filed for Chapter 11 protection Dec. 14, 2004
(Bankr. S.D. Tex. Case No. 04-47742), but the case was dismissed
on Feb. 24, 2005, by the Hon. Letitia Z. Clark.  A few days
later, the Government sold its main production unit Yugansk, to
a little-known firm Baikalfinansgroup for US$9.35 billion, as
payment for US$27.5 billion in tax arrears for 2000- 2003.

Yugansk eventually was bought by state-owned Rosneft, which is
now claiming more than US$12 billion from Yukos.

On March 10, a 14-bank consortium led by Societe Generale filed
a bankruptcy suit in the Moscow Arbitration Court in an attempt
to recover the remainder of a US$1 billion debt under
outstanding loan agreements.  The banks, however, sold the claim
to Rosneft, prompting the Court to replace them with the state-
owned oil company as plaintiff.

On April 13, court-appointed external manager Eduard Rebgun
filed a chapter 15 petition in the U.S. Bankruptcy Court for the
Southern District of New York (Bankr. S.D.N.Y. Case No. 06-
10775), in an attempt to halt the sale of Yukos' 53.7% ownership
interest in Lithuanian AB Mazeikiu Nafta.

On May 26, Yukos signed a US$1.49 billion Share Sale and
Purchase Agreement with PKN Orlen S.A., Poland's largest oil
refiner, for its Mazeikiu ownership stake.  The move was made a
day after the Manhattan Court lifted an order barring Yukos from
selling its controlling stake in the Lithuanian oil refinery.


ZALE CORPORATION: Elects Mary E. Burton as President and CEO
------------------------------------------------------------
Zale Corporation elected Mary E. Burton as president and chief
executive officer, effective July 24, 2006.

Ms. Burton had been serving as interim chief executive officer
since February 1, 2006.  She will continue as a director of the
Company.

Ms. Burton, 54, has served as a director of the Company since
August 1, 2003.  Since July 1992, She has served as chief
executive officer of BB Capital, Inc., a retail advisory and
management services company.  Ms. Burton was also chief executive
officer of the Cosmetic Center, Inc., a chain of 250 specialty
retail stores, from June 1998 to April 1999.  Prior to that, she
served as chief executive officer of PIP Printing from July 1991
to July 1992, and as chief executive officer of Supercuts, Inc.
from September 1987 to June 1991.  She is also a director of
Staples, Inc., Rent-A-Center, Inc. and Aeropostale, Inc.

The Company disclosed that Ms. Burton will receive an annual base
salary of $850,000 and in addition will receive a bonus, a minimum
of $850,000, based upon the Company's performance for the fiscal
year ending July 31, 2007.  In addition, she will receive equity
compensation consisting of:

     (a) 25,000 shares of performance based restricted stock or
         restricted stock units;

     (b) 25,000 shares of time vesting restricted stock or
         restricted stock units; and

     (c) a ten-year option to purchase 125,000 shares at an
         exercise price of $24.61 per share, with the option
         vesting over four years.

Headquartered in Irving, Texas, Zale Corporation (NYSE: ZLC) --
http://www.zalecorp.com/-- is North America's largest specialty  
retailer of fine jewelry operating approximately 2,345 retail
locations throughout the United States, Canada and Puerto Rico.
Zale Corporation's brands include Zales Jewelers, Zales Outlet,
Gordon's Jewelers, Bailey Banks & Biddle, Peoples Jewellers,
Mappins Jewellers and Piercing Pagoda.  Through its ZLC Direct
organization, Zale also operates online at http://www.zales.com/
and http://www.baileybanksandbiddle.com/   

                           *     *     *

As reported in the Troubled Company Reporter on April 12, 2006,
Zale Corporation reported that the Securities and Exchange
Commission initiated a non-public investigation relating to
various accounting and other matters related to the Company,
including accounting for extended service agreements, leases, and
accrued payroll.

Subpoenas issued in connection with the SEC investigation ask for
materials relating to these accounting matters as well as to
executive compensation and severance, earnings guidance, stock
trading, and the timing of certain vendor payments.

Zale believes that its accounting complied with generally accepted
accounting principles and is reviewing the matter.  The Company
will cooperate fully with the SEC's investigation.


* Large Companies with Insolvent Balance Sheets
-----------------------------------------------  
                                Total  
                                Shareholders  Total     Working  
                                Equity        Assets    Capital  
Company                 Ticker  ($MM)          ($MM)     ($MM)  
-------                 ------  ------------  -------  --------  
Abraxas Petro           ABP         (22)         125       (6)
AFC Enterprises         AFCE        (44)         176       31
Alaska Comm Sys         ALSK        (17)         565       24
Alliance Imaging        AIQ         (29)         683       19
AMR Corp.               AMR        (508)      30,752   (1,392)
Atherogenics Inc.       AGIX       (114)         227      182
Bally Total Fitn        BFT      (1,430)         452     (430)
Biomarin Pharmac        BMRN         46          488      322
Blount International    BLT        (134)         462      129
CableVision System      CVC      (2,468)      12,832    2,643
CCC Information         CCCG        (95)         112       34
Centennial Comm         CYCL     (1,069)       1,409       32
Cenveo Inc              CVO         (56)       1,045      157
Choice Hotels           CHH        (118)         280      (58)
Cincinnati Bell         CBB        (727)       1,888       33
Clorox Co.              CLX        (427)       3,622     (258)
Columbia Laborat        CBRX         11           43       24
Compass Minerals        CMP         (59)         702      171
Crown Holdings I        CCK         124        7,287      174
Crown Media HL          CRWN       (165)       1,229       93
Deluxe Corp             DLX         (90)       1,330     (234)
Domino's Pizza          DPZ        (609)         395       (4)
Echostar Comm           DISH       (690)       8,935    1,438
Emeritus Corp.          ESC        (105)         725      (19)
Emisphere Tech          EMIS        (26)          13      (11)
Empire Resorts I        NYNY        (28)          57       (5)
Encysive Pharm          ENCY        (38)         119       82
Foster Wheeler          FWLT       (239)       2,032      (52)
Gencorp Inc.            GY          (88)         990      (28)
Graftech International  GTI        (175)         919      286
H&E Equipment           HEES        204          667       13
I2 Technologies         ITWO        (65)         195      (20)
ICOS Corp               ICOS        (51)         248      121
IMAX Corp               IMAX        (25)         238       33
Incyte Corp.            INCY        (55)         375      189
Indevus Pharma          IDEV       (134)          86       50
J Crew Group Inc.       JCG        (489)         353       97
Koppers Holdings        KOP        (100)         556      150
Kulicke & Soffa         KLIC         65          398      230
Labopharm Inc.          DDS          (8)          46        9
Level 3 Comm. Inc.      LVLT        (33)       9,751    1,333
Ligand Pharm            LGND       (212)         289     (144)
Lodgenet Entertainment  LNET        (66)         262       15
Maxxam Inc.             MXM        (661)       1,048      101
Maytag Corp.            MYG        (187)       2,954      150
McDermott Int'l         MDR          50       3,160       277
McMoran Exploration     MMR         (21)         434      (38)
Movie Gallery           MOVI       (171)       1,248     (843)
NPS Pharm Inc.          NPSP       (129)         287      212
New River Pharma        NRPH          3           96       82
Omnova Solutions        OMN          (6)         366       67
ON Semiconductor        ONNN        (75)       1,423      279
Qwest Communication     Q        (3,060)      21,126     (923)
Riviera Holdings        RIV         (30)         219        7
Rural/Metro Corp.       RURL        (93)         302       50
Sepracor Inc.           SEPR       (109)       1,277      928
St. John Knits Inc.     SJKI        (52)         213       80
Sulphco Inc.            SUF          31           42       32
Sun Healthcare          SUNH          1         531       (46)
Sun-Times Media         SVN        (198)       1,038     (271)
Tivo Inc.               TIVO        (33)         143       19
USG Corp.               USG        (313)       5,657   (1,763)
Vertrue Inc.            VTRU        (24)         466      (78)
Weight Watchers         WTW         (42)         856      (69)
WR Grace & Co.          GRA        (515)       3,612      929

                             *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.  
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged.  Send announcements to
conferences@bankrupt.com/

On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts.  The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/books/to order any title today.

Monthly Operating Reports are summarized in every Saturday edition
of the TCR.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911.  For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                             *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,
USA, and Beard Group, Inc., Frederick, Maryland, USA.  Rizande B.
Delos Santos, Shimero Jainga, Joel Anthony G. Lopez, Tara Marie A.
Martin, Jason A. Nieva, Emi Rose S.R. Parcon, Lucilo M. Pinili,
Jr., Marie Therese V. Profetana, Robert Max Quiblat, Christian Q.
Salta, Cherry A. Soriano-Baaclo, and Peter A. Chapman, Editors.
Copyright 2006.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $725 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher Beard
at 240/629-3300.


                    *** End of Transmission ***